TYPES OF COMPANIES

Company

Statutory Company Incorporated by a Special Act passed either

by the Central Govt. or State Legislature. Intend to Carry on Some Business of

National Importance e. g. Reserve Bank of India, State Bank of India, Life Insurance Corporation, UTI

Incorporated or Registered Company Registered under the Companies Act

Company means a group of persons associated for any Common Object such as business, charity, sports and research etc.

Unlimited Companie

s

Guarantee Companie

s

Private Compani

es

Government

Companies

Holding & Subsidiary Companie

s

Kinds of Companies

Unlimited Company

Members are Liable like Partners of the Firm Not directly sued by the Creditors Don’t Require Share Capital but if it has it

may reduce/increase its sh capt without any restriction.

It may purchase its own shares Any time convert into Limited Company It must have Articles of Association

A Company Not having any limit on the Liability of its member.

Guarantee Company

Liability of Members is Limited to amount as guaranteed & specified in the Memorandum

Beyond Fixed Liability they can not called to pay

They are formed without Share Capital for Non-Trading Purpose e.g.. Promotion of Commerce, Art, Science, Culture, Sport etc.

Restriction to the Same Extent as to reduction of the Company Limited by the Shares

A Company may be limited by Shares or Guarantee.

Private Company Under Section 3(i)(iii) Restrictions- Minimum Paid-Up Capital of Rs. 1 Lakh Restriction on Transferability of Shares Restriction on Membership

Limited to 50 (200 in Companies Act, 2013) Prohibition on Issue of Prospectus Advantages- Any time convert into Limited Company Only 2 Subscribers Required Only 2 Directors Required who can be

lifetime directors Do not need to hold a Statutory Meeting &

Report Further Issue of Capital-shares must be

offered to existing members

Public Company • Companies Act. 1956:• A co which is not a pvt co• Has a minimum paid up sh capt of 5 lakh rupees • Is a pvt co which is a subsidiary of a co which is not a pvt co• New Companies Act: • A co which is not a pvt co• Has a minimum paid up sh capt of 5 lakh rupees • A co which is a subsidiary of a co, not being a pvt co, shall

be deemed to be a public co even when such subsidiary shall continue to be a pvt co in its articles.

Foreign Company

A Certified Copy of Charter, memorandum has to be filled

Full Address of Registered Office Full Address of Registered Office in India List of Directors, their Residential Address,

Nationality, Particulars of Other Directorship Name & Address of some persons resident in

India authorized to accept service of process on behalf of the Company

Document to be filled With the Registrar of the State & the Registrar at New Delhi

Under Section 591Incorporated Outside India but having a place of business in India.

Government Company At Least 51% Paid-Up Share Capital held by the

Central Govt. or by any State Govt. Auditor shall be Appointed or Re-Appointed by

the Comptroller and Auditor General of India Duty of Central Govt.

To Prepare an Annual Report on the working & affairs of the Company

Report must be ready within 3 month of the Company’s AGM before which the Audit Report is placed

Under Section 620-Exemptions by Central Govt-Any of the Provisions of the Act shall not apply to Govt. Comp or some provisions shall apply

In the absence of such exemptions whole Act will apply

Holding & Subsidiary Company

Control may be held by 3 ways: One Company controls the Composition of the

Board of Directors of another Company One Company holds the Majority of Shares in

another Company One Company is Subsidiary of another which

is itself Subsidiary of any other Company. In this case the first Company become the Subsidiary Company of the last Company

One Company has control over another, it is known as Holding Company & the Company over which this Control is exercised is known as Subsidiary Company

New companies under Companies Act, 2013

• One person company• Associate Company: in relation to another co, means a co in

which that other co has a significant influence, but which is not a subsidiary co of the co having such influence and includes a joint venture co.

Significant influence: control of at least 20% of total share capital or of business decisions under an agmt

• Small company: means a co other than a public co--paid up sh capt: does not exceed 50 lakh Rs / such higher amt not

exceeding 5 cr-turnover- as per last P/L A/c does not exceed 2 cr/such amount not

exceeding 20 cr: This clause does not apply to holding co/subsidiary co/charitable co/ a co or body corporate governed by an special Act.