On the basis of incorporation
· Chartered company
· Statutory company
· Registered company
On the basis of number of members
· Private company
· Public company
On the basis of liability
· Unlimited company
· Company limited by shares
· Company limited by guarantee
On the basis of ownership
· Government Company
On the basis of domicile
· National company
· Foreign company
· Multinational company
On the basis of control
· Holding company
· Subsidiary company
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The Royal Charter or a special sanction of the state establishes Chartered Company
The East India Company, the Bank of England and Hudson’s Bay Company is some of the examples of a chartered company.
Nowadays, this type of company is not more popular.
A company, which is created by a special act of the parliament and whose objectives, powers and activities are defined by the act, is called a statutory company.
Nepal Rastra Bank, Reserve Bank of India, State Bank of Pakistan, Central Bank of Sri Lanka etc are the some examples of statutory companies.
Every company has its company law.
The companies that are formed and registered under the common company law are called registered companies.
The working of registered companies is governed by the provision of company act.
Google India Private limited, Walmart, Apple Inc. Toyota Motor Corporation etc are some examples of registered companies.
Unlimited Liabilities Company
It is a company in which the liability of the members is unlimited like a partnership firm.
If the assets of the company are not sufficient for satisfying the claims of creditors, the shareholders are liable to pay more than the face or nominal value of the shares held by them.
It is taken from their personal property.
Company limited by shares
A company limited by shares is registered under the provisions of the company act.
It is limited with a specific amount of share capital divided into a definite number of shares.
The liability of shareholders is limited to the extent of the face value of the shares they have paid for.
This type of company is quite common these days.
Company limited by guarantee
The company where each shareholder promises to pay a specific sum as guarantee at the time of winding up of the company more than face value is called a company limited by guarantee.
Such guarantee is specified in the Memorandum of Association of the company.
The amount of such guarantee may differ from member to member.
A private company is a company which Memorandum of Association limits the number of its members not exceeding fifty and prohibits the sales of its shares to the general public.
A private company must use the words private limited (Pvt or Pte Ltd) with its name.
The following are the main constitutional rights of a private company.
· Private company can be established by a single person.
· It does not need to publish a prospectus at the time of the issue of its shares.
· It can commence of business before receiving business-starting certificate.
· It is not necessary to hold a statutory meeting.
· It does not need to issue memorandum of association and articles of association.
Keep in Mind (KIM)
Private limited are written as: (P) Ltd, Pvt Ltd, Pte Ltd
Limited Company writes Limited, Ltd, LLC, Inc.
A public company is a company, which collects major capital by offering shares to the general public.
Its number of membership is governed by the registered authorized capital.
Minimum shareholders are seven but no limit of maximum.
The shares are transferable to others.
It can sell debentures in markets to raise additional capital as loans.
Nepal SBI Bank Ltd, Reliance Jio Infocomm Limited, Pakistan Telecommunication Company Ltd etc are some of the examples of public companies.
These companies must write ‘Ltd’ word with their name; in America and Europe LCC and Inc. (Google LLC, Facebook Inc. Apple Inc.)
The following are the main advantages of a public company.
· The shares are transferable.
· The liability of shareholders is limited.
· It is free to invite the public to buy its shares and debentures.
· A large capital not exceeding the registered capital can be collected for mass production purposes.
· An effective and efficient management is possible.
Government Company is a company in which not less than 51% of the paid-up equity share capital is held by the government.
Nepal Doorsanchar Company Ltd, Indian Oil Corporation Limited, Pakistan Petroleum are some of the examples of government companies.
The company, which is not a government undertaking, is called Non-government Company.
Generally, company owned, managed and controlled by the private sector come under this category.
Chaudhary Group is the examples of non-government companies.
A company which is registered in a country and restricted to do business in foreign country is known national company.
This company operates its business within the national boundary.
Foreign company is registered in one country and does business in other country also.
But foreign company is not registered in that country.
Multinational companies have their presence and business in two or more countries.
In other words, a company which carries on business activities in more than one country is known as multinational company.
Holding company is also called Parents Company but there are some differences.
The company that purchases more than 50% equity shares of another company is called holding company.
It controls or owns other company by 51% or more than 51% voting right.
A separate company or legal business entity, which is controlled by holding company, is called subsidiary company.
This company contains less than 50% of equity shares.
Subsidiary company operates its business under the control of holding company.
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