A statutory company is a type of business organization that is created and governed by a specific set of laws, known as statutory law. These laws are enacted by a legislative body, such as a parliament or congress, and provide the framework for the operation and management of the company.
One of the main characteristics of a statutory company is that it is a separate legal entity from its owners and shareholders. This means that the company has its own legal identity and can enter into contracts, own property, and incur debts in its own name. This also means that the shareholders of a statutory company are not personally liable for the debts or obligations of the company, which provides some protection to the owners of the company.
There are several types of statutory companies, including limited liability companies, public limited companies, and cooperative societies. Each of these types of companies has its own specific set of rules and regulations that govern its operation and management, as well as its relationship with shareholders and other stakeholders.
One of the main benefits of a statutory company is that it provides a more formal and structured way of doing business. This can be especially useful for larger companies that need to manage complex operations and relationships with multiple stakeholders. Additionally, the legal protections afforded to shareholders in a statutory company can provide some peace of mind to those who are investing in the company.
However, there are also some drawbacks to forming a statutory company. One of the main drawbacks is that these types of companies tend to have more complex and time-consuming compliance requirements, which can be burdensome for smaller businesses. Additionally, statutory companies may also be subject to more stringent regulatory oversight, which can be costly and time-consuming to navigate.
In summary, a statutory company is a type of business organization that is created and governed by specific laws, and is a separate legal entity from its owners and shareholders. While these types of companies offer some legal protections and a more formal structure for doing business, they may also be subject to more complex compliance requirements and regulatory oversight.