Corporate Knowledge

Meaning of Company and Kinds of Company

Meaning of Company

Company is an

Separate Legal Entity

Incorporated by

Thorough the Process of Law

Meaning of Company

Company is an Separate legal entity incorporated by group

of person through the process of law

Common seal

Characteristics of Company

Separate Legal Entity Perpetual

Existence

Limited Liability of Members Separate

Ownership and

Management

Incorporate by

Process of Law

Subsidiary

Company ?

Public company?

Government

Company?

Limited

company?

Holding

Company ?

Private Company

?

KINDS OF COMPANIES

KINDS OF COMPANIES Private Company: A private

company is one which has a minimum paid share capital as may be prescribed and which by its AOA: Restricts the right of its share Limits the number of its

members excluding present and past employee member to 200

Prohibits any invitation to the public to subscribe for any securities of the company

It must have at least 2 members

It must have min. two directors “Private Ltd” Word is used after

the name of company

Public Company: A public company is a company which

Is not a private company or Is a private company, being

subsidiary of a company which is not a private company and

Which has minimum paid up share capital as may be prescribed

It must have at least 7 members. It must have min. 3 directors “Limited” word is used after the

name of the company

Government company Any Company In which not less than 51% of the paid

up share capital held by Central government

Any State government/s

Or partly by CG and partly by SG/s

Holding and Subsidiary Company

A subsidiary is a company with voting stock that is more than 50% controlled by another company, usually referred to as the parent company or the holding company.

A subsidiary is partly or completely owned by the parent company, which holds a controlling interest in the subsidiary company.

Holding and Subsidiary Company

Limited Company and Unlimited Company

Limited Liability Company: A company having the liability of its members limited by the memorandum to the amount, if any, unpaid on shares respectively held by them is termed as “Company Limited by shares

Unlimited Liability Company: It’s a company where the liability of members is unlimited. It means in the event of winding up, the debts of the company shall be met from private property of the shareholders

Limited Company and Unlimited Company

Limited CompanySec 2(22)

Unlimited CompanySec 2(92)

My Liability is unlimited

My Liability is

Limited

Company Limited by Guarantee

It’s a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up.

One Person Company It’s a company which has only one member It’s a company incorporated as a private

company. Rule 3 of the companies act, 2013 provides that

Only natural person being Indian citizen and resident in India can form one person company.

One person can form only one ‘one person company’ It can be formed for charitable purpose Its paid up share capital is not more than Rs.50lakh Its average annual turnover should not exceed

Rs.2crore

Difference among one person company, private company and public company

Public companyOne Person company Private company

Min. 7 and Max no limit

Transfer of share is usually without restriction

Share can be offered to public

Min 2 and Max 200 (excluding present and past employee members)

AOA restricts the transfer of share

Share can not be offered to public

Min. and Max member is one.

Not transfer of share as only one member

Shares can not be offered to public

Difference among one person company, private company and public company

Public companyOne Person company Private company

Min. 3 Directors

Max. 15 directors

Can invite and accept deposit from public

The Word “ Limited” is used as part of name

Min 2 Directors

Max. 15 Directors

Can not invite and accept public deposit

The word “Private Limited” are used as part of the name

Min. one director

Max directors 15

Can not invite and accept deposit from public

The word “OPC” is used as part of name