Kinds of Companies¶
Chartered Companies¶
Chartered companies are formed by a royal charter granted by the monarch. They typically enjoy exclusive rights and privileges granted by the state and have historical significance, having been used to incorporate professional bodies, learned societies, or for trade and exploration purposes. Examples include the Bank of England and the East India Company.
Statutory Companies¶
These companies are established by a specific act of Parliament or state legislature, often to serve a public purpose, such as the provision of utilities. They are governed by the statutes under which they are created. Examples are the Reserve Bank of India and the Life Insurance Corporation of India.
Unregistered Companies¶
Unregistered companies do not fall under the Companies Act and are subject to the court's supervision. They cannot opt for voluntary dissolution and represent a less common form of organization.
Registered Companies¶
Registered companies are incorporated under the Companies Act and are the most prevalent type. They include entities limited by shares, by guarantee, and unlimited companies, each with distinct features regarding liability and capital structure.
Classification of Registered Companies¶
- Unlimited Companies: Members face unlimited liability for the company's debts and obligations.
- Companies Limited by Guarantee: Members' liability is limited to the amount they agree to contribute to the company's assets if it is wound up.
- Companies Limited by Shares: Liability is limited to the amount unpaid on their shares.
Private vs. Public Companies¶
- Private Companies restrict share transfer and limit the number of shareholders to 200, barring public from subscribing to shares.
- Public Companies allow unrestricted share transfers and an unlimited number of shareholders, inviting public investment.
Special Categories¶
- Government Companies: Majority of capital held by government.
- Foreign Companies: Incorporated outside but operate in India.
- Holding and Subsidiary Companies: Defined by control and ownership.
- One Person Companies (OPC): Allows a single individual to incorporate a company.
- Small Companies: Defined by their capital and turnover, enjoying relaxed compliance requirements.
- Associate Companies: Partially owned by another company but not a full subsidiary.
- Dormant Companies: Inactive companies, recognized under the Companies Act for regulatory purposes.
- Producer Companies: Focus on primary production and benefit their members.
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