What Are The Different Types Of Companies?

What Are The Different Types Of Companies?
Share

1 Answer

  1. Companies can be classified on the basis of the following:
    1. Based on the Mode of Incorporation
    Companies can further be of three types on the basis of modes of incorporation:
    i) Royal Chartered Companies: These companies don’t exist any more. These are the companies created by a Royal Charter (monarchs and kings).
    ii) Statutory Companies: Incorporated by means of special act by centre or state legislature.
    iii) Incorporated Companies: These are companies registered under the companies act.
    2. Based on the Number of Members
    Companies can further be of three types on the basis of number of members:
    i) Public Limited Company: Existence of a Public Limited Company is seperate from that of its shareholders. There need to be a minimum of 7 members to form a public limited company.
    ii) Private Limited Company: More than 2 and less than 50 members are required for a private limited company. Here shares are subscribed by its members only and subscription is not open to general public.
    iii) One Person Company: Only a single person is allowed to register a company under the one person company category.
    3. Based on Liability of the Members
    Companies can further be of three types on the basis of member liability:
    i) Limited by shares: Liability of shareholders is limited to the amount they have invested.
    ii) Limited by guarantee: On liquidation, shareholders have to pay the amount guaranteed by them.
    iii) Unlimited companies: No limit on the liability of the shareholders.
    Here is a link to an article for better understanding: https://www.feedough.com/types-of-companies/

    • 0

Leave an answer

You must login to add an answer.