Question

Answer the following question:

Explain any four types of companies.

Answer 1

The different type of companies are explained as follows:
(1) Statutory Company: It is a company formed by a special law or statute passed by the Central or State Legislature for a particular type of commercial activity. The objectives, privileges, etc. of the statutory company are laid down by the special Act. Examples are the Reserve Bank of India, the Life Insurance Corporation of India, etc. It cannot use the word ‘limited’ at the end of its name since all such companies are fully owned by the government.
(2) Registered Company: A company registered under the Companies Act, 2013, or under the previous Companies Acts is called a registered or an incorporated company. The formation, functioning, and management of such companies are governed according to the provisions of the Companies Act, 2013. All the existing companies in India, except the statutory companies, are registered companies.
(3) Private Limited Company: A private limited company is the one which by its Articles of Association : (a) restricts the right of its members to transfer the shares; (b) limits the maximum number of members to 200 (excluding its past and present employees), and (c) prohibits an invitation to the public to subscribe to its shares or debentures.
At least two members are required to form such a company. A private company must use the word ‘Private’ in its name.
(4) Public Limited Company: According to the Indian Companies Act, a public company means a company which is not a private company. Hence, it can be said that a public company is the one which : (a) does not restrict the right of its members to transfer their shares freely, (b) does not limit its membership to 200, (c) can invite the public to subscribe to its shares and debentures.
A public company requires a minimum of seven members for incorporation. There is no restriction on the maximum number of members.
(5) Government Company: As mentioned in Section 617 of the Companies Act, 1956, any company in Which not less than 51% of the paid-up share capital is held by the Central Government or by any State Government or partly by the Central Government and partly by State Government is known as a government company. A subsidiary company of a government company is also called as a government company. It is registered under the Indian Companies Act. Bharat Heavy Electricals Ltd, (BHEL), Bharat Electronics Ltd. (BEL), Steel Authority of India Ltd, (SAIL), Oil and Natural Gas Corporation Limited (ONGC Ltd.), etc; are some examples of government companies.