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Types of Companies

The document discusses different types of companies based on various classification criteria such as incorporation, liability, number of members, control, ownership, and purpose. It outlines five main categories for classifying companies: 1) Based on incorporation - such as chartered, statutory, registered, licensed, and foreign companies. 2) Based on liability - such as companies with limited liability, unlimited companies, and companies limited by guarantee. 3) Based on number of members - private and public companies. 4) Based on control - holding and subsidiary companies. 5) Based on ownership - government companies, one man companies, deemed public companies, non-trading companies, and investment companies.

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Poojan Karia
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47 views

Types of Companies

The document discusses different types of companies based on various classification criteria such as incorporation, liability, number of members, control, ownership, and purpose. It outlines five main categories for classifying companies: 1) Based on incorporation - such as chartered, statutory, registered, licensed, and foreign companies. 2) Based on liability - such as companies with limited liability, unlimited companies, and companies limited by guarantee. 3) Based on number of members - private and public companies. 4) Based on control - holding and subsidiary companies. 5) Based on ownership - government companies, one man companies, deemed public companies, non-trading companies, and investment companies.

Uploaded by

Poojan Karia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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NAME- RAJ PAREKH

ROLLNO. 097
• IT s voluntary incorporated association which is an artificial
person created by law with limited liability having common
seal and perpetual succession. According sec 3(1)I of
companies act company means “a company formed and
registered under the act, or an existing company.
• On the Basis of Incorporation:-
1. Chartered Companies: Companies set up as a result of a royal
charter granted by a king or queen of a country are known as
chartered companies. Example: East India Company, the Bank of
England etc.
2. Statutory Companies: Companies set up by Special Acts of
Parliament or State Legislatures are called Statutory Companies.
Example: Reserve Bank of India, Life Insurance Corporation of
India, Unit Trust of India etc..
• 3. Registered Companies: Companies registered under the
Indian Companies Act, 1956 or under any of the previous
Companies Acts are called registered companies. Most of the
companies in India belong to this category

• 4. Licensed Companies: Companies established for the


promotion of arts, science, religion, charity or any other similar
objects can obtain license under Sec.25 from the Central
Government and enjoy certain privileges.
• 5. Foreign Companies: A company incorporated outside India
under the law of the country of incorporation but having
established its business in India is called a foreign company.
II. ON THE BASIS OF LIABILITY
1. Companies with Limited Liability: It is a company where the
liability of the shareholder remains limited to the nominal
value of the shares held by him.
2. Unlimited Companies: Here the liability of its members is
unlimited. In other words, their liability extends to their
private properties also. Unlimited companies are almost non-
existent these days.
3. Companies Limited by Guarantee: In a guarantee company
the liability of a shareholder is limited to the amount he has
voluntarily undertaken to contribute towards the assets of the
company to meet out any deficiency at the time of it winding
up. Such a company may or may not have a share capital.
• III. ON THE BASIS OF NUMBER OF MEMBERS
• 1. PRIVATE COMPANY :- A company which has a minimum paid-
up capital of Rs 1,00,000 or such higher paid up capital as may be
prescribed, and by its articles a. Restricts the right to transfer its
shares, if any b. Limits the number of its members to 50. c. Prohibits
any invitation to the public to subscribe for any shares in, or
debentures of, the company, d. Prohibits any invitation or acceptance
of deposits from persons other than its members, directors or their
relatives.

• 2. PUBLIC COMPANY :- A public company means a company


which- a. has a minimum paid-up capital of Rs. 5 lakh or such higher
paid-up capital, as may be prescribed. b. is a private company which
is a subsidiary of a company which is not a private company. Every
public company, existing on the commencement of the Companies
Act, 2000, with a paid-up capital of less than Rs. 5 lakh, within a
period of two years from such commencement, enhance its paid-up
capital to Rs. 5 lakh
• IV. ON THE BASIS OF CONTROL:-
• 1. Holding Companies: A company is known as the holding company
of another company if it has control over the other company.
According to Sec 4(4) a company is deemed to be the holding
company of another if, but only if that other is its subsidiary. A
company may become a holding company of another company in
either of the following three ways :- a) by holding more than fifty per
cent of the normal value of issued equity capital of the company; or
b) b) By holding more than fifty per cent of its voting rights; c) or c)
by securing to itself the right to appoint, the majority of the directors
of the other company , directly or indirectly.
• 2. Subsidiary Company:- A company is know as a subsidiary of
another company when its control is exercised by the latter (called
holding company) over theSubsidiary Company. [Sec. 4 (I)]. A
company is know as a subsidiary of another company when its control
is exercised by the latter (called holding company) over the
• V. ON THE BASIS OF OWNERSHIP 1.Government Company: A
Government Company means any company in which not less than 51
per cent of the paid-up share capital is held by (a) the Central
Government, or (b) any State Government or Governments, or (c)
partly by the Central Government and partly by one or more State
Governments. A subsidiary of a Government company is also called
a Government company Example: Indian telephone Industries
Hindustan Aeronautics Ltd.

• 2. One Man Company:- A member may hold virtually the entire


share capital of a company. Such a company is known as a “one-man
company”. This can happen both in a private company and a public
company. The other member/ members of the company may be
holding just one share each. Such other members may be just
dummies for the purpose of fulfilling the requirements of law as
regards minimum membership 3. Deemed Public Company: The
Companies (Amendment) Act. 2000 has, by introducing a sub-
section (11) to Section 43A, made that a private company will not
automatically become a public company on account of shareholding
or turnover
• 4. Non-Trading Company/Non-Profit Association: Such a
company must have the objects of promoting of commerce, arts,
science, religion, charity or any other useful object and must
apply its profit, if any, or other income in promoting its object
and must prohibit payment of any dividend to its members. 5.
Investment Companies: An investment company is a company the
principal business of which consists in acquiring, holding and
dealing in shares and securities. It involves only the acquisition
and holding of shares and securities and thereby earning
income by way of interest, dividend, etc.
•THANK YOU

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