Know what are the types of a company. Companies are classified on the basis of Transferability of Shares On the basis of Liability On the basis of Control Other companies For more Visit: http://studymyright.com

2. Classification
of
Companies
On the Basis
of
Transferability
of Shares
On the Basis
of Liability
On the Basis
of Control
Others

3. On the basis of
Transferability of
Shares
Private Company
One person
Company
Small Company
Others
Public Company

4. Private Company
• Private Company means a company having a prescribed minimum paid-up
share capital, and which by its articles,-
i. Restricts the right to transfer its shares.
ii. Except in case of One Person Company, limits the number of its members to two
hundred:
• But where two or more persons hold one or more shares in a company
jointly, they shall be treated as a single member.
• And where
i. Persons who are in the employment of the company; and
ii. Former employees who were members of company while in that employment and
continued as a member after employment ceased,
shall not be included in number of members
• Private Company prohibits invitation to public to subscribe for any security
of the company.

5. Types of Private Companies
• One Person Company: One Person Company is a private company,
which can be formed with only 1 owner, who acts as both the director
as well as a shareholder of the company. There can be more than 1
director, but not more than one shareholder.
However the paid-up Capital cannot exceed Rs. 50 lakh and turnover
cannot exceed Rs. 2 Crore.
• Small Company: Small Company is a private company-
• Whose paid up share capital does not exceed Rs. 50 lakh, and
• Turnover for immediately preceding year does not exceed Rs. 2 crore.

6. • Other Private Companies: Other private companies are those which
are those companies which are having no restriction as to turnover
and paid-up share capital but there are many formalities to be
complied with if company is registered as private company.

7. Public Company
• Public Company is a company whose ownership is organized via
shares of stock which are intended to be freely traded on a stock
exchange or in over-the-counter markets.
• Public companies have certain inherent advantages over private
companies as it sells future equity stakes and increase access to debt
markets.

8. On the Basis of
Liability
Company limited
by shares
Company limited
by guarantee
With Share
Capital
Without Share
Capital
Unlimited
Company

9. Company limited by Shares
• Company limited by shares means a company in which memorandum
of association of the company specifies that the liability of the
shareholders are limited to the amount of that is not paid on their
holdings.

10. Companies limited by guarantee
• With Share Capital: A Company in which the liability of members is
limited to a definite sum stated in the memorandum and the unpaid
amount of the holdings of Companies which are limited by guarantee
with share capital.
• Without Share Capital: A Company in which the liability of members
is limited to a definite sum stated in the memorandum are Companies
limited by guarantee.

11. Unlimited Company
• An Unlimited Company is a company whose liability does not have
any limit. In this type of company, the liability of the members ends
when he/she ceases to be a member of that company.
• Advantage of Unlimited Company is that the Creditors have
confidence of repayment of their money from the company even on
the winding up of the company.

12. On the basis
of Control
Holding
Company
Subsidiary
Company
Associate
Company

13. Holding Company
• A Parent Company that owns and controls the management and
composition of the Board of directors of another company is called
holding Company; or
• If a Company holds stake of 51% or more of paid-up share capital is
known as holding company.

14. Subsidiary Company
• A Subsidiary Company is the company whose 51% or more shares are
owned by another company.
• The company is said to be subsidiary if the parent company controls
the management and its board of directors.
• Subsidiary Company’s major decisions are influenced by the Parent
Company(i.e. Holding Company)

15. Associate Company
• Associate Company means a company in which that other company
has a significant influence, but which is not a subsidiary company of
the company having such influence and includes a joint venture
company.

16. Others
Foreign Company
Government
Company
Companies for
Charitable
Purposes
Dormant
Companies
Nidhi Companies

17. Foreign Company
• Foreign company means any company or body corporate
incorporated outside India which—
• has a place of business in India whether by itself or through an agent,
physically or through electronic mode; and
• conducts any business activity in India in any other manner.

18. Government Company
• A Government company is one in which not less than 51% of the
paid-up share capital is held by the Central Government or a State
Government or jointly by both.
• A subsidiary of a Government company shall also be treated as a
Government company. These companies are registered as private
limited companies though their management and their control vest
with the government.

19. Companies for Charitable Purposes
• A Section 8 Company is registered as a limited company under section
8 of Companies Act, 2013 and holds the licence from Central
Government, having the following features:
• has in its objects the promotion of commerce, art, science, sports, education,
research, social welfare, religion, charity, protection of environment or any
such other object;
• intends to apply its profits, if any, or other income in promoting its objects;
and
• intends to prohibit the payment of any dividend to its members,

20. Dormant Companies
• A dormant company is a company that has been registered under the
Companies Act but is not carrying out any significant accounting
transaction. As per Companies Act 2013, a company that has been
formed and registered under the Act:
• For a future project or to hold an asset or intellectual property and,
• Has no significant accounting transaction, is permitted to make an application
to the Registrar to obtain the status of a dormant company.

21. Nidhi Companies
• Nidhi Company is a non-banking financial business structure. Nidhi
Company performs the functions of lending and borrowing of money
within its members where it works through its members only.
• Nidhi Company is formed to increase the habit of savings only for
mutual benefit among its member only.
• Registration of Nidhi Company is very simple and less complicated. It
has been more popular in southern part of India.