Classification of Companies

• Statutory Company - This company is incorporated by a special Act passed by the central or State Legislature. Reserve Bank of India, State Bank of India and Life Insurance Corporation are some of the examples of statutory companies.

• Such companies do not have any memorandum of association. They derive their power from the Acts constituting them and enjoys certain powers.

• These companies are generally formed to meet social needs and not for the purpose of earning profits.

• Registered Company - These are formed under the Companies Act, 2013. Such companies  come into existence only when they are registered under the Act and a certificate of incorporation has been issued by the Registrar of companies.

• This is the most popular mode of incorporating a company.

• Chartered Company - Chartered companies are incorporated under a special charter by a monarch. The East India Company, The Bank of England are examples of chartered companies.

• The powers and nature of business of a chartered company are defined by the charter which incorporates it.

• A chartered company has wide powers. It can deal with its property and bind itself to any contract.

• Companies Limited by Shares - These types of companies have a share capital and the liability of each member or the company is limited by the memorandum to the extent of face value of shares subscribed to by him.

• A company limited by shares may be a public company or a private company. These are the most popular types of companies.

• Companies Limited by Guarantee - These type of companies may or may not have a share capital. Each member promises to pay a fixed sum of money in the memorandum in the event of liquidation of the company. This amount promised by him is called 'Guarantee'.

• The article of Association of the company state the number of members with which the company is to be registered.

• Such a company is called a company limited by guarantee.  

• Unlimited Company - A company not having any limit on the liability of its members is called an 'Unlimited Company'.

• An unlimited company may or may not have a share capital. If it has a share capital, it may be a public company or a private company.

• Private Limited Company - According to Section 2 (68), A "Private Company" means a company which has a minimum paid up shares capital of ₹ 1 lakh.

• The shares of a private company cannot be transferred to every person.

• A private company cannot have more than 200 members. And Minimum number of members are 2.

• It restricts the right of the members to transfer its shares.

• Private Company cannot invite public to subscribe to its shares.

• i) One Person Company - It has only one member. The person must be a natural person ( e.g, not company ) resident in India. One person can form only one person company.

• OPC must have a nominee, who becomes a member in case of original member's death.

• A minor cannot become a member or the nominee.

• ii) Small Company - Small Company is a private company. It should have paid up capital of not more than ₹ 50 lakh.

• It enjoys certain privileges. OPC is a type of small company.

• Public Limited  Company - According to Section 2 (71), Defines a public company to mean a company which -

• Is not a private company. 

• Has minimum paid up capital of ₹ 5 lakh.

• The minimum number of members required is 7. And There is not limit for maximum number of members.

• The shares are freely transferable. And Subsidiary of a public company is deemed to be a public company. 

• i) Listed Company - A listed company means a company which is listed on different recognized stock exchange in India and outside India.

• ii) Unlisted Company - An unlisted Company means a company whose shares are not available to general public for trading and not listed on any recognised stock exchange.

• Holding Company - A company which controls another company is known as holding company. 

• Subsidiary Company - A company which controls another company is known as holding company. And the company so controlled is termed as subsidiary company.

• Government Company - Accordingly to section 2 (45), Defines a government company as a company in which not less than 51℅ of the paid up share is held : 

• By the Central governments; or By any State Government.

• Examples of Government Companies are OIL, SAIL, NMTC, STC, NTP, etc.

• Foreign Company - "Foreign company" means any company or body corporate incorporate outside India which :

• Has a place of business in India whether by itself or through an agent and carries on the business, physically or through electronic mode, and

• Conducts any business activity in India in any other manner.

• Indian Company - Indian Company is a company which is registered in India . An Indian Company is one which gets itself registered in the Companies Act, 2013.