I have been away for a couple weeks hence my tardy reply.
Company flags were typically retired after the formation of a regiment/battalion. For the Confederates and before the adoption of actual battle flags by the various Confederate armies/corps/divisions, company flags could indeed see battle useage. One of the SC regiments carried their company flags at First Mansassas; the 15th Mississippi lost 7 of their 10 company flags at Mill Springs (although a couple probably came from their camps). At Gettysburg the 21st Virginia carried a company flags (which one is unknown) into battle at Culp's Hill and it was captured there. They used this flag as their First National battle flag had been lost at Chancellorsville and their ANV replacement flags would not arrive to their division (Ed Johnson's) until late August, 1863. Several 1st Georgia (Ramsey's) company flags were lost on the Rich Mountain Campaign of 1861. A large number of them were taken at Ft. Donelson with the 23rd Mississippi losing a documented five flags (and probably the rest too). There's more, mostly early war.
Before the various battle flags came about one of the company banners was chosen as regimental colors with the rest of the flags being sent home, carried in company baggage, etc.
By April, 1862, company flags pretty much dry up in terms of their issuance to units - based on my many years of research in Confederate period newspapers.
I find them very fascinating as these are the flags from the people these men directly defended and you cannot get a better connection with home than these flags. Some are superb pieces of art and many are of unique designs too. Someday maybe someone will make a serious study of these flags.