TYPES OF COMPANIES PPT IS AVAILABLE AT THE END OF THIS TOPIC
Content
1. Meaning of company
2. Types of companies
3. Download PPT
Meaning of company- A company is a natural legal entity formed by a group of individuals to work together & operate towards achieving a common objective. A company can form by doing legal registration under the companies act.
2. Types of companies
On the basis of
1. Incorporation
2. Place of registration
3. Liability of members
4. Membership Pattern
5. Authority
6. Other types of companies
1. On the basis of Incorporation
a) Chartered companies
These companies set up as a result of a royal charter (Document) granted by a king or queen of a country are known as charted companies.
These companies are very old & rare. Example- East India Company
b) Statutory companies
These Companies set up by the special act of parliament or state legislatures are called statutory companies. These types of companies are financed by the government.
Its powers and control are also decided by the rules of the legislature. Example- Reserve bank of India, Life Insurance company (LIC).
c) Registered Companies
Any companies registered under the companies act 2013 or under any previous, companies act are called registered companies. Example- Reliance, Wipro, etc
2. ON THE BASIS OF PLACE OF REGISTRATION
a) Foreign Companies
Foreign companies are incorporated outside India. They also conduct business in India using a place of business either by themselves or with some other company.
b) Indian companies
It is a company formed and registered under the Companies Act, 1956. The registered or principal office of the Indian company, corporation, institution, association or body, in all cases, should be in India, though it may carry on some business activities on foreign land also.
3. On the basis of the Liability of members
a) Companies Limited by Shares
Sometimes, shareholders of some companies might not pay the entire value of their shares in one go. In these companies, the liabilities of members are limited to the extent of the amount not paid by them on their shares.
This means that in case of winding up, members will be liable only until they pay the remaining amount of their shares.
b) Companies Limited by Guarantee
In some companies, the memorandum of association mentions amounts of money that some members guarantee to pay.
In case of winding up, they will be liable only to pay only the amount so guaranteed. The company or its creditors cannot compel them to pay any more money.
c) Unlimited Companies
Unlimited companies have no limits on their members’ liabilities. Hence, the company can use all personal assets of shareholders to meet its debts while winding up.
Their liabilities will extend to the company’s entire debt.
4. ON THE BASIS OF MEMBERSHIP PATTERN
a) One Person Companies (OPC)
These kinds of companies have only one member as their sole shareholder. They are separate from sole proprietorships because OPCs are legal entities distinct from their sole members.
Unlike other companies, OPCs don’t need to have any minimum share capital.
b) Private Companies
Private companies are those whose articles of association restrict the free transferability of shares. In terms of members, private companies need to have a minimum of 2 and a maximum of 200.
These members include present and former employees who also hold shares.
c) Public Companies
In contrast to private companies, public companies allow their members to freely transfer their shares to others.
Secondly, they need to have a minimum of 7 members, but the maximum number of members they can have is unlimited.
5. ON THE BASIS OF THE AUTHORITY OF THE COMPANY
a) Holding Companies
This type of company directly or indirectly, via another company, either holds more than half of the equity share capital of another company or controls the composition of the Board of Directors of another company.
b) Subsidiary Company
A company, which operates its business under the control of another (holding) company, is known as a subsidiary company.
c) Government Companies
Government companies are those in which more than 50% of the share capital is held by either the central government, by one or more state governments, or jointly by the central government and one or more state governments.
6. OTHER TYPES OF COMPANIES
a) Producer Companies
“Producer Company” means a body corporate having objects or activities specified in section 581B and registered as a Producer Company under the Companies Act, 1956.
A producer company can be defined as a legally recognized body of farmers/ agriculturists with the aim to improve the standard of their living and ensure a good status of their available support, incomes and profitability.
b) Small Company
Small company” means a company, other than a public company,— paid-up share capital of which does not exceed 50 lakh rupees or a such higher amount as may be prescribed which shall not be more than 10 crore rupees; and
turnover of which as per profit and loss account for the immediately preceding financial year does not exceed 2 crore rupees or a such higher amount as may be prescribed which shall not be more than 100 crore rupees
c) Investment Companies
Investment Companies are the companies that have a fundamental business or transaction relating to the securities of other companies.
Securities may be of the nature of shares or debenture or other securities offered by such entity. The investment is aimed not only at the acquisition and holding but perhaps even the sale of the securities whenever they reach a better price.
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