3. TYPES
• From the point of view of Incorporation.
• From the point of view of Liability.
• From the viewpoint of Nationality.
• From the view point of Public Interest.
4. From the point of view of Incorporation.
Types of Companies
CHARTERED STATUTORY REGISTERED
5. CHARTERED COMPANY
• Historically, most of the early companies were
set up through a Royal Charter.
• For example, the East India Company, the
Chartered Bank of Australia, India and China,
etc., were incorporated by the grant of a special
Royal Charter,
• In India, this form of organization does not exist
now because there is no monarchy.
• Even in England, this method is rarely used now.
Companies of this kind may be called chartered
companies.
6. STATUTORY COMPANY
• In this case, a special law is passed to establish
the company.
• This is done only in special cases when it is
necessary to regulate the working of the
company for some specific purposes.
• Examples of such companies in India are: the
Industrial Finance Corporation, the Life
Insurance Corporation of India, the Air India, etc.
7. REGISTERED COMPANY
• The Companies Act, 1956, lays down procedures by which a company
can be brought into existence.
• Anybody who wants to incorporate a company can do so by taking
necessary steps outlined therein.
• By far the largest number of companies is incorporated under the
Companies Act. These companies may be called registered
companies.
8. From the point of view of Liability.
TYPES
UNLIMITED GUARANTEE LIMITED
9. ULIMITED COMPANY
• Do not have any limit on the extent of liability of its members.
• Liability of each member extends to whole amount of the company’s
debts and liabilities.
• However, the members cannot be sued upon the directly by the
company's creditors.
11. Company Limited By Guarantee
Not Having Share Capital
•Memorandum Limits the member’s
liability.
•It is limited to the amount as may have
been undertaken by MOA to contribute
in the case of winding up.
12. Company Limited By Guarantee
Having Share Capital
•Memorandum Limits the member’s
liability.
•Moreover, liability would also extend to
the unpaid value of the shares held by
the member.
13. LIMITED COMPANY
• The liability of the members of the company is limited to the amount
remaining unpaid on the shares.
• Hence the holders of the fully paid up shares cannot be called upon
for the further contribution.
• The liability of the members holding the partly paid up shares exists
even if the company is in process of winding up.
15. NATIONAL COMPANY
In this case, the control and the
management of the affairs of the
company are to be carried out within
the geographical boundaries of the
country.
16. MULTINATIONAL COMPANY
The branch is not an Independent entity
and is linked up to the parent company
existing in some other country.
17. From the view point of Public
Interest.
TYPES
PRIVATE PUBLIC GOVERNEMENT
18. PRIVATE COMPANY
•Section 3(l) (iii) states that Private Company is a
company Which by its Articles,
•Restricts the rights of the members to transfer the
shares,
•Limits the membership to 50, excluding the past
and present employees of the company who are
the members of the company, and
•Prohibits the invitation to public, for subscription of
shares or debentures of the company.
19. PUBLIC COMPANY
•Section 3(l) (iii) states that Public Company is a
company Which by its Articles,
•Does not restrict the rights of the members to
transfer the shares,
•Does not limit the membership to 50, excluding the
past and present employees of the company who
are the members of the company, and
•Invites the public, for subscription of shares or
debentures of the company.
20. GOVERNMENT COMPANY
•Defined under Section 617 of Companies Act,
1956.
•It is a company in which 51% of the paid up
share capital is held either by the central
government or by state government or partly by
both of them.
•It is introduced in Companies Act, 1956, hence it
will mean a company registered and
incorporated under the companies Act, 1956.
21. PRACTICAL PROBLEMS
• In a private limited Company it is discovered that there are, in
fact, 54members. On an enquiry, it is ascertained that 6 of such
members have been employees of the Company in the recent
past and that they acquired their shares while they were still
employees of the Company. Is it necessary to convert the
Company into a public limited Company
Ans. As per Section 3(1) (iii), a Company to be registered as a
private Company must restrict its membership to 50 only. But,
however, in counting this number of 50 members, employee
members and ex-employee members (i.e., those who become
members while in the employment of the Company but now
having retired still continue to retain membership) are to be
excluded. Thus, in the given case, the Company shall continue to
be a private Company. There is no need for conversion.
