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KINDS OF COMPANIES
1.0 What are the two major types of companies in India?
Private Company
a) One Person Company
b) Small Company
Public Company
2.0 Which section talks or mentions the same?
Section 3(1) of the Companies Act, 2013
company may be formed for any lawful purpose by—
(a)
seven or more persons, in a public company;
(b)
two or more persons, in a private company; or
(c) one person in One Person Company (private
company) by subscribing their name to a Memorandum and complying with other
requirements for registration
KINDS OF COMPANIES 1
, 3.0 Different types of classification of companies?
3.1 A) On the basis of incorporation
Statutory Companies → that are constituted by a Special Act of the Parliament or
State Legislature. Eg: Reserve Bank of India, Life Insurance Corporation of India.
Companies Act, 2013- does not apply to them
Registered Companies → that are incorporated under the Companies Act, 2013 or
under any previous company law, with ROC
3.2 B) On the basis of liability
Unlimited Liability - in which members are liable for the company's debts in
proportion to their respective interests in the company and their liability is unlimited
Limited by guarantee - liability of its members limited to such amount as the
members may respectively undertake, by the memorandum, to contribute to the
assets of the company in the event of its being wound-up.
KINDS OF COMPANIES 2
, Limited by shares - liability as to the amount that only remains unpaid to the
respective shares that are held by a person
3.3 C) Other types of Companies
(a) Associations not for profit having license under Section 8 of the Companies Act,
2013 or under
any previous company law;
(b) Government Companies; (c) Foreign Companies (d) Holding and Subsidiary
Companies; (e) Associate Companies/Joint Venture Companies; (f) Investment
Companies; (g) Producer Companies; (h) Nidhi Companies; (i) Dormant Companies
4.0 Private Company
4.1 Which Section?
Section 2 (68) of Companies Act, 2013
4.2 What are the requirements as per the section?
i) a minimum paid up share capital as may be prescribed by rules (earlier, was 1
lakh rupees)
ii) restriction on the transferability of shares
iii) only 200 members, not in the case of OPC
who will not be considered as members according to the section?
those who are currently in employment and those who were formerly
employees, and were members then and have still continued to remain
members after their employment - shall not be considered to be members.
such exemption cannot be claimed by first being a member and then an
employee
where two or more persons own a share together, they shall be considered
to be a single member
iv) prohibits invitation to the public to subscribe for any securities of the company.
can issue debentures to any number of persons, the only condition being that an
invitation to the public to subscribe for debentures is prohibited.
a minimum of 2 directors - Section 149 (1)
KINDS OF COMPANIES 3
KINDS OF COMPANIES
1.0 What are the two major types of companies in India?
Private Company
a) One Person Company
b) Small Company
Public Company
2.0 Which section talks or mentions the same?
Section 3(1) of the Companies Act, 2013
company may be formed for any lawful purpose by—
(a)
seven or more persons, in a public company;
(b)
two or more persons, in a private company; or
(c) one person in One Person Company (private
company) by subscribing their name to a Memorandum and complying with other
requirements for registration
KINDS OF COMPANIES 1
, 3.0 Different types of classification of companies?
3.1 A) On the basis of incorporation
Statutory Companies → that are constituted by a Special Act of the Parliament or
State Legislature. Eg: Reserve Bank of India, Life Insurance Corporation of India.
Companies Act, 2013- does not apply to them
Registered Companies → that are incorporated under the Companies Act, 2013 or
under any previous company law, with ROC
3.2 B) On the basis of liability
Unlimited Liability - in which members are liable for the company's debts in
proportion to their respective interests in the company and their liability is unlimited
Limited by guarantee - liability of its members limited to such amount as the
members may respectively undertake, by the memorandum, to contribute to the
assets of the company in the event of its being wound-up.
KINDS OF COMPANIES 2
, Limited by shares - liability as to the amount that only remains unpaid to the
respective shares that are held by a person
3.3 C) Other types of Companies
(a) Associations not for profit having license under Section 8 of the Companies Act,
2013 or under
any previous company law;
(b) Government Companies; (c) Foreign Companies (d) Holding and Subsidiary
Companies; (e) Associate Companies/Joint Venture Companies; (f) Investment
Companies; (g) Producer Companies; (h) Nidhi Companies; (i) Dormant Companies
4.0 Private Company
4.1 Which Section?
Section 2 (68) of Companies Act, 2013
4.2 What are the requirements as per the section?
i) a minimum paid up share capital as may be prescribed by rules (earlier, was 1
lakh rupees)
ii) restriction on the transferability of shares
iii) only 200 members, not in the case of OPC
who will not be considered as members according to the section?
those who are currently in employment and those who were formerly
employees, and were members then and have still continued to remain
members after their employment - shall not be considered to be members.
such exemption cannot be claimed by first being a member and then an
employee
where two or more persons own a share together, they shall be considered
to be a single member
iv) prohibits invitation to the public to subscribe for any securities of the company.
can issue debentures to any number of persons, the only condition being that an
invitation to the public to subscribe for debentures is prohibited.
a minimum of 2 directors - Section 149 (1)
KINDS OF COMPANIES 3
