In
company law, perpetual succession is the continuation of a
corporation
A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...
's or other organization's existence despite the death, bankruptcy, insanity, change in membership or an exit from the business of any owner or member, or any transfer of
stock
In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a compan ...
, etc.
Perpetual succession, along with the
common seal, is one of the factors explaining a corporation's legal existence as separate from those of its owners. This principle states that:
*any change in membership of a company does not affect the status of the company,
*death, insolvency, insanity etc. of any member of a company does not affect the continuity of the company. Thus the life of the company does not depend upon the life of its members.
*it shall continue forever irrespective of continuity of its members or directors, except in case of
liquidation
Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistrib ...
(or "winding up") of a company.
{{DEFAULTSORT:Perpetual Succession
Business terms