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Types of Companies: Name-Raj Parekh ROLLNO. 097

This document defines different types of companies and classifies them based on several criteria. It discusses: 1) Classification based on incorporation - including chartered, statutory, registered, licensed, and foreign companies. 2) Classification based on liability - including companies with limited liability, unlimited companies, and companies limited by guarantee. 3) Classification based on number of members - including private and public companies. 4) Classification based on control - including holding and subsidiary companies. 5) Classification based on ownership - including government companies, one-man companies, deemed public companies, non-trading companies, and investment companies.

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Poojan Karia
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49 views

Types of Companies: Name-Raj Parekh ROLLNO. 097

This document defines different types of companies and classifies them based on several criteria. It discusses: 1) Classification based on incorporation - including chartered, statutory, registered, licensed, and foreign companies. 2) Classification based on liability - including companies with limited liability, unlimited companies, and companies limited by guarantee. 3) Classification based on number of members - including private and public companies. 4) Classification based on control - including holding and subsidiary companies. 5) Classification based on ownership - including 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 PPTX, PDF, TXT or read online on Scribd
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TYPES OF

COMPANIES
NAME- RAJ PAREKH
ROLLNO. 097
DEFINITION
•  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.
CLASSIFICATION OF COMPANIES:
• 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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