TYPES OF COMPANIES

TYPES OF COMPANIES

1. Private Company :- Section 3(1)(iii)

 Means a company which has a minimum paid-up capital of one lakh rupees 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 fifty not including

           (i) persons who are in the employment of the company; and

          (ii) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment  ceased;  and

      (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: - Section 3 (1) (iv)

Means a company which__

       (a) is not a private company;

       (b) has a minimum paid-up capital of five lakh rupees or such higher paid-up capital, as may be prescribed;

       (c) is a private company which is a subsidiary of a company which is not a private company.

3. Company Limited by Shares :- Section 12(2)(a)

A company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them.

4. Company Limited by Guarantee :- Section 12(2)(b)

A company having the liability of its members limited by the memorandum 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.

5. Unlimited Company - Section 12(2)(c)

A company not having any limit on the liability of its member

6. Power to dispense with "Limited" in name of charitable or other company – Section 25(1)

Where it is proved to the satisfaction of the Central Governmentthat an association:

  (a) is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object, and

 (b) intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members,

The Central Government may, by license, direct that the association may be registered as a company with limited liability, without the addition to its name of the word "Limited" or the words "Private  Limited".

An application to Regional Director electronically in the prescribed E- form No. 24A requesting for issue of a license under Section 25 for incorporating a company without  the addition to its name of the word “limited” or the words “Private limited”  as the case may be (Regulation 3 of Companies Regulations, 1956)

The application in the prescribed E-Form No. 24A should be accompanied with attachments as mentioned in Regulation 4 (i) to 4(ix) of Companies Regulations, 1956)

7. Government Companies- Section 617

Means any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary of a Government company as thus defined.

Section 17, 18, 19 and 186 apply to Government Company also.

8. Foreign Companies – Section 591 to 602

 Means companies falling under the following two classes, namely:-

 (a) companies incorporated outside India which, after the commencement of this Act,  establish a place of business within India; and

(b) companies incorporated outside India which have, before the commencement of this Act, established a place of business within India and continue to have an established place of business within India at the commencement of this Act.

Notwithstanding anything contained in sub-section (1) above, where not less than fifty per cent, of the paid-up share capital (whether equity or preference or partly equity and partly preference) of a company incorporated outside India and having an established place of business in India is held by one or more citizens of India or bodies corporate incorporated in India whether singly or in the aggregate.

9. Holding and Subsidiary Company – Section 4

A company shall, subject to the provisions of sub-section (3), be deemed to be a subsidiary of another if, but only if,

   (a) that other controls the composition of its Board of directors; or

     (b) that other

          (i) where the first-mentioned company is an existing company in respect of which the holders of preference shares issued before the commencement of this Act have the same voting rights in all  respects as the holders of equity shares, exercises or controls more than half of the total voting power of such company;

          (ii) where the first-mentioned company is any other company, holds more than half in nominal value of its equity share capital; or

    (c) the first-mentioned company is a subsidiary of any company which is that other's subsidiary.

10. Producer Companies – Section 581A to 581 ZT –

"Producer institution" means a Producer Company or any other institution having only producer or producers or Producer Company or Producer Companies as its member whether incorporated or not having any of the objects referred to in section 581B and which agrees to make use of the services of the Producer Company or Producer Companies as provided in its articles – Section 581A (m)

11. Deemed Public Company - Section 43A

where not less than twenty-five per cent of the paid-up share capital of a private company having a share capital, is held by one or more bodies corporate the private company shall,     

(a) on and from the date on which the aforesaid percentage is first held by such body or bodies corporate, or     

(b) where the aforesaid percentage has been first so held before the commencement of the Companies (Amendment) Act, 1960 (65 of 1960) on and from the expiry of the period of three months from the date of such commencement unless within that period the aforesaid percentage is reduced below twenty-five per cent of the paid-up share capital of the private company, become by virtue of this section a public company