Types of Co.: - 1.public Company Means A Company Which Not A Private Company

Types of Co.
• 1.Public Company means a company

which not a private company.
• 2.Private Company means a company which
by its articles of association :-
– Restricts the right of members to transfer its
shares
– Limits the number of its members to fifty. In
determining this number of 50, employee-
members and ex-employee members are not to
be considered.
– Prohibits an invitation to the public to
subscribe to any shares in or the debentures
of the company.
Following are some of the privileges and
exemptions of a private limited
company:-
• Minimum number is members is 2 (7 in case of public companies)
• Prohibition of allotment of the shares or debentures in certain cases unless statement in lieu
of prospectus has been delivered to the Registrar of Companies does not apply.
• Restriction contained in Section 81 related to the rights issues of share capital does not
apply. A special resolution to issue shares to non-members is not required in case of a
private company.
• Restriction contained in Section 149 on commencement of business by a company does not
apply. A private company does not need a separate certificate of commencement of
business.
• Provisions of Section 165 relating to statutory meeting and submission of statutory report
does not apply.
• One (if 7 or less members are present) or two members (if more than 7 members are
present ) present in person at a meeting of the company can demand a poll.
• In case of a private company which not a subsidiary of a public limited company or in the
case of a private company of which the entire paid up share capital is held by the one or
more body corporate incorporated outside India, no person other than the member of the
company concerned shall be entitled to inspect or obtain the copies of profit and loss
account of that company.
• Minimum number of directors is only two. (3 in case of a public company)
company:
• Where at least 25% of the paid up share capital of a private company is held by
one or more bodies corporate, the private company shall automatically become
the public company on and from the date on which the aforesaid percentage is
so held.
• Where the annual average turnover of the private company during the period
of three consecutive financial years is not less than Rs 25 crores, the private
company shall be, irrespective of its paid up share capital, become a deemed
public company.
• Where not less than 25% of the paid up capital of a public company limited is
held by the private company, then the private company shall become a public
company on and from the date on which the aforesaid percentage is so held.
• Where a private company accepts deposits after the invitation is made by
advertisement or renews deposits from the public (other than from its members
or directors or their relatives), such companies shall become public company on
and from date such acceptance or renewal is first made.
4.Limited and Unlimited
companies:
• Company limited by shares In this case, the liability of members
is limited to the amount of uncalled share capital. No member of
company limited by the shares can be called upon to pay more
than the face value of shares or so much of it as is remaining
unpaid. Members have no liability in case of fully paid up shares.
• Company limited by the guarantee A company limited by
guarantee is a registered company having the liability of its
members limited by its memorandum of association to such
amount as the members may respectively thereby undertake to
pay if necessary on liquidation of the company. The liability of
the members to pay the guaranteed amount arises only when the
company has gone into liquidation and not when it is a going
concern. A guarantee company may be a company with share
capital or without share capital.
• Unlimited Company: The liability of
members of an unlimited company is
unlimited. Therefore their liability is
similar to that of the liability of the
partners of a partnership firm.
5.Section 25 Companies
• : Under the Companies Act, 1956, the name of a public
limited company must end with the word 'Limited' and the
name of a private limited company must end with the word
'Private Limited'. However, under Section 25, the Central
Government may allow comapnies to remove the word
"Limited / Private Limited" from the name if the following
conditions are satisfied :-
• The company is formed for promoting commerce, science,
art, religion, charity or other socially useful objects
• The company does not intend to pay dividend to its members
but apply its profits and other income in promotion of its
objects.
6.Holding and
Subsidiary companies
• That other company controls the composition of
its board of directors ; or
• That other company holds more than half in
face value of its equity share capital
• Where the first mentioned company is
subsidiary company of any company which that
other's subsidiary. eg Company B is subsidiary
of the Company A and Company C is subsidiary
of Company B, therefore Company C is
subsidiary of Company A.
7.Government Companies
• Means any company in which not less than 51% of the paid
up share capital is held by the Central Government or any
State Government or partly by the Central Government and
partly by the one or more State Governments and includes a
company which is a subsidiary of a government company.
Government Companies are also governed by the provisions
of the Companies Act. However, the Central Government
may direct that certain provisions of the Companies Act
shall not apply or shall apply only with such exceptions,
modifications and adaptions as may be specified to such
government companies.
8. Foreign Companies
• Means a company incorporated in a

country outside India under the law of
that other country and has established
the place of business in India.

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Types of Co.

• 1.Public Company means a company

• Means a company incorporated in a

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