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Question

When we say that a company has perpetual existence we mean ________.

A
its continuity is not affected by the change in its membership
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B
its life is coterminous with the life of its chairman
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C
its life is defined in the memorandum of association
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D
its life is limited to the life of plant and machinery
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Solution

The correct option is A its continuity is not affected by the change in its membership
When we say that a company has perpetual existence we mean its continuity is not affected by the change in its membership. Perpetual succession means that the members may come and go but the company will go on forever. The death, insanity, bankruptcy of members will not affect the existence of the company. This also justifies the concept of going concern.

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