INDIAN COMPANIES

ACT, 1956

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THE COMPANIES ACT

1956
Definition
Various

types of
companies

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Meaning of the term

Company

Company : [section 3(1)]

Formed & registered under the

companies Act

Any existing company established under

any previous Act.

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COMPANY

Company is an artificial person

It is considered as a separately legal

entity for the purpose of law.

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Various Types Of
Companies
There

are many types of company

depending upon the Difference in the

objects of it.

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Various Types Of
Companies
Types of Company
Incorporation
Chartered
Company

Registered
Company

Statutory
Company

Limited by shares

Liability

Control
Govt. or
Non. Govt.

Foreign or
Domestic

Public
Private
Limited By Guarantee

Public
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Holding &
Subsidiary

Private

Unlimited Company

On the basis of
Incorporation
Chartered Company

A Company incorporated under a special charter granted by the

Queen of England is called Chartered Company.

The Company is regulated by its Charter and Companies Act

does not apply to this kind of company.

The Charter also prescribe the nature of Business and the power
of the Company.

Examples : East India Company and

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Bank Of England

On the basis of
Incorporation
Statutory Company

A Statutory Company is one which is created by a Special Act of

Parliament or a state legislature.
For achieving the purpose of public utility.
The nature and the power of such companies are laid down in the
special Act under which they are created.
Memorandum of Association is not required.
Not required to Use limited after its name.

Examples : RBI, UTI, LIC, State Bank of India.

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On the basis of
Incorporation
Registered Company

A Registered Company is one which is registered in accordance

with the provisions of the Companies Act, 1956 and includes the
existing Companies formed under any other law.

Comes into existence by receiving the certificate of Incorporation.

Governed by the Companies Act ,1956.

Registered Company may be PRIVATE OR PUBLIC COMPANY.

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On the basis of
Incorporation
Private Company

Section 3(1)(iii):

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A Private Company means a company which has a minimum

paid up capital of Rs. 1,00,000/- or such higher paid up capital
as may be prescribed by its articles

Restrict the right to transfer its shares, if any;

Limits the number of the member to fifty,

Prohibits any invitation to the public to subscribe for any

shares in or debenture of the company.

Prohibits any invitation or acceptance of deposits from

persons other than its members, directors or its relatives.
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On the basis of Incorporation

Public Company

Section 3(1)(iv):

Public company means a company which is Either

not a private and has a minimum paid-up capital of

Rs. 5,00,000 or such higher paid-up capital as may
be prescribed;

Is a private company which is a subsidiary of

public company.

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On the basis of
Incorporation
Public Company

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There is no restriction on the number of members. However, the

maximum number of members depends upon the number of
shares allotted.
Public company may be
a)
A company limited by shares
b)
A company limited by guarantee
c)
An unlimited company.
In case a public company is a limited company, then it must add
the word Limited at the end of its name.
It must have minimum at least 7 members.
It must have at least 3 directors.
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On the basis of
incorporation
Company not for Profit

According to Section 25, the Central Government may by

license grant that an association may be registered as a
company with limited liability, without using the words limited
or pvt ltd as a part of its name.
An association must satisfy the following condition;
a)

b)
c)

The association about to be formed as a limited company aims at

the promotion of commerce, art, science, religion, charity, or any
other useful objective ;
It intends to apply its profits, if any, for promoting its objects; and
It prohibits the payment of dividend to its members.

Central Govt. has a power to revoke the license of such company.

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On the basis of
Liability
Limited by shares [Section 12(2)(a)]

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A company limited by shares is a company in which the liability of

its members is limited by its Memorandum to the amount unpaid
on the shares respectively held by them.
It may either public or private Company.
If member of the company pays a full amount on shares then his
liability would be nil.

Features:
The liability of its members is limited up to the amount
remaining unpaid on the shares held by them.
Such liability can be enforced either during the lifetime or
during the winding up of the company.
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On the basis of
Liability
Limited by Guarantee [Section 12(2)(b)]

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A company in which the liability of its members is limited by its

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.
For the purpose of Commerce, science, art, religion, charity or any
other useful objects.

Features:
The liability of its members is limited up to the amount
Guaranteed by them.
Such liability can be enforced only after the commencement of
winding up of the company and not during the lifetime of it.
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On the basis of
Liability
Unlimited Company [Section 12(2)(c)]

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A company in which the liability of its members is limited by its

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.
For the purpose of Commerce, science, art, religion, charity or any
other useful objects.

Features:
The liability of its members is limited up to the amount
Guaranteed by them.
Such liability can be enforced only after the commencement of
winding up of the company and not during the lifetime of it.
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On the basis of
Control
Government Company [Section 617]

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A Government company means any company

in which at least 51% of the paid up share
capital is held by the Central Government or by
any state Government.
Even a subsidiary company of Government is
regarded as a government Company.
Example: Indian telephone Industries,
Hindustan Aeronautics Ltd.

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On the basis of
Control
Non - Government Company

A company which may not be termed as

a a government company as defined in
section 617 is regarded as a non
Government company.

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On the basis of
Control
Foreign Company
A company which is incorporated outside India under the law of
that country is known as a Foreign Company.

i.

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After the establishment of Business in India, the following

documents must be filed with the Registrar of companies within
30 days for the date of establishment.
A certified copy of the charter or statutes under which the company is
incorporated

ii.

The full address of the registered office of the company.

iii.

A list if directors & secretary of the company.

iv.

The full address of the companys principal place of business in India.

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On the basis of
Control
Domestic Company

A company which cannot be termed as

foreign company under the Provisions of
the Companies Act should be regarded
as a Domestic company.

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On the basis of
Control
Holding & subsidiary Company

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If one company controls over the another company, the

controlling company may be termed as a Holding
Company and company so controlled may be termed
as Subsidiary Company.

Section 4(4) of the act defines a holding Company as

holding company of another, if that other is its subsidiary.

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a Company shall be deemed to be the

On the basis of
Control
Public Financial Institute

a)
b)

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The Central Government by notification in the official Gazette is empowered to

specify any other institution as public Financial Institutions if:

It is constituted under any Central Act or is held or

controlled by the Central Government.
Not less than 51 percent of its paid up Capital is
controlled or held by the Central Government.

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On the basis of
Control
Public Financial Institute

1.
2.
3.
4.
5.
6.

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Under Section 4A of the Act, following institution are

deemed to be Public Financial Institutions:
The Industrial Credit and Investment Corporation of India Ltd.
The Industrial Financial Corporation of India.
The Industrial Development Bank of India.
The Life Insurance Corporation of India.
The Unit Trust of India.
The Infrastructure Development Finance Company Limited.

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On the basis of
Control
Multi national Companies

A Multinational Companies is huge Organisation which

a)

Operates in more than one country.

b)

Carries out production, marketing and research

activities on international scale in those countries

c)

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Attempts to maximize profit world over.

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THANK
YOU

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