COMPANY MEANING
The term company is an amalgamation of two Latin words "Com" (with or together) and "Panis" (bread). It originally referred to an association of persons who took their meals together. In legal sense, a company is an association of both natural and artificial persons incorporated under the existing Law of a country. In simple words, it is an artificial person created by Law.
COMPANY DEFINITION
According to section 2(20) of the Companies Act, 2013, company means a company incorporated under this Act (Companies Act, 2013) or under any previous Company Law. The Act does not define a company in terms of its features.
KINDS OF COMPANY
The Companies Act, 2013 provides for 2 types of companies that may be promoted and registered under this Act.
Classification of Companies
They are
(i) Private Companies
(a) One Person Company
(b) Small Company
ii) Public Companies
Further, the companies are classified into:
(i) Statutory Companies: Companies established by Special Acts of Parliament are known as Statutory Companies. Reserve Bank of India, Life Insurance Corporation of India are examples of this type.
(ii) Registered Companies: Companies incorporated under the Companies Act, 1956 or under the earlier Companies Act are known as Registered Companies.
(iii) Companies Limited by Shares [Section 2 (22)]: Company Limited by shares means a company having the liability of its member limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them.
(iv) Companies Limited by Guarantee Section 2 (21): Companies Limited by guarantee means a company having the liability or its member limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the events of its being wound up.
(v) Unlimited Liability Companies [Section 2 (92)]: A company having no limit on the liability of it members is an unlimited liability company. An unlimited company may or may not have a share capital. In the case of an unlimited liability company, the liability of each member extends to the whole amount of un company's debts and liabilities.
(vi) Private Company [Section 2 (68)]: A Private Company means a company which by its articles.
(a) Restricts the right to transfer its shares, if any;
(b) Except in case of one person company, limits the number of its members to two hundred except
persons who are in the employment of the company, and
persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased;
(c) Prohibits any invitation to the public to subscribe for any securities of the company;
(vii) Public Company [Section 2 (71)]: A Public company means a company which:
(a) not a Private Company,
(b) is a private company which is a subsidiary of a company which is not a private company.
(viii) Listed Public Company: A listed public company means a public company which any of its securities has listed in any recognized stock exchange.
(ix) Unlisted Public Company: An unlisted public company is one whose securities are not listed in any recognized stock exchange.
(x) Holding Company [Section 2 (46)]: A holding company is one which holds more than 50% of the nominal value of the equity share capital of another company or one which has power to appoint or remove a majority of directors of another company.
(xi) Subsidiary Company [Section 2 (87)]: A company is deemed to be subsidiary of another if:
(a) That other controls the composition of its Board of directors;or
(b) That other:
Where the first-mentioned company is an existing Company in respect of which the holders of preference Shares issued before the commencement of this Act have the same voting rights in all respects as the holders of equity shares, exercises or controls more than halt of the total voting power of such company;
Where the first-mentioned company 1s any other company, holds more than half in nominal value of its equity share capital; or.
(c) The first-mentioned company is a subsidiary of any company which is that other's subsidiary.
(xii) Government Company [Section 2 (45)]: "Government company, means any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government company as thus defined".
(xii) Foreign Company [Section 2 (42)]: Foreign Company is a company which is incorporated outside India and has a principal place of business in India. The provisions of the Companies Act applies to Foreign Companies also as regard to their working in India.
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