Let’s Discuss Some Kinds of Companies
“The criteria fixed for forming a company usually also determine its type.”
Different kinds of companies come into existence depending upon various factors. Let’s discuss some of them.Chartered companies --- These types of companies are chartered under Royal Charter issued by the head of the state. Under the charter, certain exclusive rights and privileges are granted to the companies for undertaking certain commercial activities.
Statutory companies --- These are formed by special acts of parliament or state legislature. The rights, powers and responsibilities of these companies are clearly defined by the concerned act. Registered companies are the companies registered under the provisions of companies act.
Companies limited by shares --- These companies have a share capital. The shareholders pay share money at one time or in installments. The shareholders are not liable to pay anything more than the value of shares held by them, whatever be the liability of the companies.
Companies limited by guarantee — These companies are also formed under the Companies act (as per rules prevalent in a country) with a stipulation in the memorandum clause that members are guaranteed to pay a certain amount of money in case of its winding up. The amount, which members undertake to pay, is called the guarantee money.
Unlimited companies --- These are the companies that are registered without limiting the liability of the members to the value of shares. The companies are just like partnership concerns where liability is limitless. The difference being that they have certain advantages that are not possible with a partnership concern.
Private companies -– A private company can be formed with an association of at least two members. It is generally a family affair. Its shareholders are relatives, friends or business acquaintances. The drawbacks of partnership firms encourage the formation of private companies.
Public companies --- A public company means that public at large is interested in those companies. The membership of a public company is open to all persons capable of entering a contract. There is no restriction on the maximum number of members.
In addition to the above-mentioned companies there are many other types also. Actually, the criteria fixed for forming a company determine its type also.
Author - DeeKay
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