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Kinds of companies

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  • 1. KINDS OF COMPANIES Under The Company Act, 1956 or special Act
  • 2. The Company o Company basically means a group of persons associated for any common object such as business, charity, sports and research etc. o Legally, Company is an incorporated association which is an artificial person, having separate legal entity, with perpetual succession, a common seal, a common capital comprised of transferable shares and carrying limited liability. o Classification is required to define legal guidelines clearly as per different objectives and ownership patterns.
  • 3. On the Basis of Incorporation Statutory Companies:• Incorporated by a special Act of Legislature •Goals, powers, liabilities and other functional areas are defined under the special act. Registered Companies •Formed and registered with the Registrar of companies under the Companies Act.
  • 4. On the Basis of Liability  Limited by Shares • Liability of the shareholders is limited to the extent of amount unpaid on shares held by them . • Necessary for these companies to use the word limited after their name.  Limited by Guarantee • Liability of the shareholders is limited to the extent of amount undertaken by them to contribute to the assets of the firm in the event of winding up . • It may or may not have share capital.  Unlimited Companies • No limit on the liability of its shareholders . • Liability of each member extends to whole amount of the company’s debts and liabilities. • It may or may not have share capital.
  • 5. On the basis of Number of Members  Private Companies • Has minimum paid capital of one lakh rupees or more • Can have a minimum of 2 and maximum of 50 members • Has restricted the right to transfer its shares to any other person • Prohibits any invitation to general public for the subscription of its shares or debentures  Public Companies • Has a minimum paid-up capital of rupees five lakhs or more • Does not restrict the right to transfer its shares to any other person • Can invite general public for the subscription of its shares or debentures • Can invite or accept deposits from the public.
  • 6. COMPANIES Registered Cos. Statutory Cos. Cos. Ltd. By shares Pubic Public Private Cos. Ltd. by Guarantee Cos with S. capital Private Public Cos without S. Capital Unlimited cos. Cos with S. capital Cos. Without S. Capital Private Public Public Private Private
  • 7. OTHER KIND OF COMPANIES  Licensed companies or companies not for profit • Formed for promoting commerce, art, science or other useful object. • Does not intend to apply its profit for payment of any dividend to its members.  One man company or family company • One man holds practically the whole of the share capital of a company • Few more dummy members (Family members) to meet the statutory requirement of minimum no of persons.
  • 8. OTHER KIND OF COMPANIES  Foreign companies • A company incorporated outside the region of a nation but has a place of business in the nation [sec. 591(1)].  Government Companies • Companies in which not less than 51 % of the paid up share capital is held either by central or state government or both of them jointly. • All the subsidiary companies of government companies are included in the list of government companies
  • 9. OTHER KIND OF COMPANIES  Holding company • Company which holds more than half of the nominal value of share capital of another company or controls the composition of board of directors of another company.  Subsidiary Companies • Company whose more than half of the nominal value of share capital is held by another company or another company controls the composition of board of directors of such company.
  • 10. OTHER KIND OF COMPANIES  Holding company • Company which holds more than half of the nominal value of share capital of another company or controls the composition of board of directors of another company.  Subsidiary Companies • Company whose more than half of the nominal value of share capital is held by another company or another company controls the composition of board of directors of such company.

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