Classification of Companies

A company can be classified into different forms on the basis of various factors such as on the basis of incorporation ,on the basis of liability.

1. Classification on the basis of Incorporation

On the basis of Incorporation, there are 2 types of companies.
  • Statutory Companies :- These companies are constituted by a special Act of parliament or state Legislature. Example- Reserve Bank of India, Life Insurance Corporation of India, etc.
  • Registered Companies :- These companies are incorporated by registering under Companies Act, 2013 or under any previous law.

2. Classification on the basis of Liability

On the basis of Liability there are 3 types of companies.

  • Unlimited Liability Companies :- In this company liability is unlimited.The members are liable for the companies debts in proportion to their respective interests in the company. Such companies may or may not have share capital. They may be either a private company or a public company.
  • Companies limited by Guarantee :- In this company the members are limited to such amount as the members are undertaken, by the memorandum, to contribute to the asset of the company in the events of its being wound-up. 
  • Companies limited by shares :- In this companies the members liabilities are limited by the memorandum to the amount if any unpaid on the shares respectively held by them.

3. Other Forms of Companies

  • Companies not for profit under section 8
  • Government Companies 
  • Foreign Companies
  • Holding and subsidiary companies
  • Associate Company/Joint Venture Companies
  • Investment Companies
  • Producer Companies
  • Dormant Companies

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