Types of Companies

(I) On the basis of Incorporation:

(i) Statutory Companies
(ii) Registered Companies
(II) On the basis of Liability:
(i) Limited liability companies
- limited by share
- limited by guarantee
(ii) Unlimilited liability companies

(III) On the basis of Number of members:

(i) Public Companies
(ii) Private Companies
(IV) On the basis of Ownership:
(i) Government companies
(ii) Non-government companies
(V) On the basis of Control:
(i) Holding company
(ii) Subsidiary company

(VI) Others:
1. Foreign company
2. Associate companies
3. One person company
4. Small company
5. Dormant company

Private Company
private company
means a company having a minimum paid-up share
capital of one lakh rupees or such higher paid-up share
capital as may be prescribed,
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:
(iii) prohibits any invitation to the public to subscribe
for any securities of the company;

Features:
1. Must necessarily have its own
Articles of Association.
2. Should have at least two directors.
3. The word 'Private Limited' must be
added at the end of its name.
Conversion of a private company into a
public company ???

Public Company
public company
means a company which
(a) is not a private company;
(b) has a minimum paid-up share capital of five lakh
rupees or such higher paid-up capital,
as may be prescribed:
Provided that a company which is a subsidiary of a
company, not being a private company, shall be
deemed to be public company for the purposes of
this Act even where such subsidiary company
continues to be a private company in its articles ;
Conversion of a public company into a private
company ???

Public vs. Private

company
Public company
1. Minimum capital : 1 lakh
2. Minimum members : 7
3. Maximum numbers : no
restriction
4. Number of Directors :
3 (Min.) and 15 (Max.)
5. Restriction on appointment
of directors : Registrars
consent reqd.

Private company
1. Minimum capital : 5 lakhs
2. Minimum members : 2
3. Maximum numbers : 200
4. Number of Directors : 2
(Min.) and 15 (Max.)
OPC : 1
5. Restriction on appointment
of directors : Registrars
consent not reqd.

NOTE : Number of directors can exceed 15 by passing

a special resolution but with atleast 1 woman director

Public company
6. No restriction on invitation to
subscribe for shares
7. Transferability of
shares/debentures : Free
8. Quorum :
(i) 5, if not members not more
than 1000
(ii) 15, if more than 1000 < 5000
(iii) 30, if exceeds 5000

Private company
6. Restriction on invitation to
subscribe for shares
7. Transferability of
shares/debentures :
restricted by Article
8. Quorum : 2

Holding & Subsidiary Company

Holding company:
a company is known as holding company of another
company if it has control over that other company
Subsidiary company:
A company is deemed to be a subsidiary of another
company in the following 3 cases(i) company controlling composition of BoD
(ii) Holding of majority shares
(iii) subsidiary of another subsidiary

Government Company
Government company means any company in
which not less than 51% of the paid-up share
capital is held
(i) by the Central Government, or by any
(ii) State Government or Governments, or
(iii) partly by the Central Government and partly by
one or more State Governments,
and includes a company which is a subsidiary
company of such a Government company.

Foreign Company
Any company incorporated outside India which
has an established place of business in India or
through an agent physically or electronic mode.

Associate company
Associate company in relation to another
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.

One person company (OPC)

NOTE : A single person is entitled to incorporate maximum
of 5 OPCs

A company
in which one man holds practically the whole
of the share capital of the company.

Features:
1.
2.
3.
4.
5.

Dummy members are usually nominees

Can only be incorporated as a private limited company
Can have only one member
May have only 1 director though more are allowed
Words One person company to be added with the companys
name
6. AGM not mandatory but if directors are more than 1, it should
be held

Small company
Small company means a company, other than a public
company, (i) paid-up share capital of which does not exceed 50 lakh
rupees or such higher amount as may be prescribed which
shall not be more than 5 crore rupees; or
(ii) turnover of which as per its last profit and loss account
does not exceed 2 crore rupees or such higher amount as
may be prescribed which shall not be more than 20 crore
rupees:
Provided that it shall not apply to:
(a) holding/subsidiary co.
(b)A company regd. Under Sec 8 (associations for profit)
(c) A co. governed by any special act

Dormant Company
Companies which are
not carrying on any significant
accounting transaction for a period
of 2 years can apply to RoC for
getting declared as dormant
OR
annual returns not filed for 2 financial
years consecutively