Types of Companies under the Companies Act 2013

Starting a Company in India requires one to choose a type of company. A company formed under the Companies Act can be Classified based on their Incorporation, Ownership, Membership, control and Liability. Based on incorporation companies are classified into Chartered Companies, Statutory Companies, Registered Companies and Body Corporate. Based on Ownership they are classified into Government Companies and Non Government companies. Based on control they are classified as Holding and Subsidiary Companies. Based on Liability the companies can be limited by shares, limited by guarantee or unlimited company.

Based on Membership a Company is classified as Private Limited Company, Public Limited Company and One Person Company. Other Classifications include Small Companies, Foreign Companies, Investment Companies, Not for Profit Association and Associate Company.

The Concept of One Person Company and Small Company has been introduced for the first time in the Companies act 2013. Some of the major classification of Companies are discussed below.

Private Company (Other than One Person Company [Section 2 (68) Companies Act, 2013])

A Private company should be commenced with a minimum of two members and a paid up capital of 1 lakh Rupees. The Maximum number of members is limited to 200 not including any present or past employees. A Private company is also prohibited from inviting the public to subscribe for its securities.

One Person Company

The Concept of One Person Company is introduced in the Companies Act, 2013. A One Person Company is a Company which has only one member. The Word One Person Company shall be mentioned below the name of the company. The Memorandum shall indicate the name of the another person as a nominee with his prior consent who shall in the event death or incapacity of the subscriber (Member of the OPC) will become the member of the company.

Small Company

A Small Company is a company other than a Public Company whose paid up capital or Turnover does not exceed Rs. 50 Lakh and Rs.2 Crore Respectively.  However a higher amount can be prescribed which shall not exceed Rs.5 crore and 20 crore respectively. A Small Company does not include holding, subsidiary, or not for profit companies.

Public company

A Public Company means a Company which is not a private Company and has a minimum paid up capital of 5 lakh rupees. A private company which is a subsidiary of a public company is also deemed to be a public company.

Government Companies

A 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 Partly by the Central Government and partly by one or more State Governments. A company which is a subsidiary of a government company is also deemed to be a government company.

Statutory Corporation

A Statutory Corporation is created by a special act of the parliament/state assembly. Nature and powers of such companies are laid down in the special Act. The Audit of a Statutory Corporation is conducted under the control and supervision of the Comptroller Auditor General of India.

Holding Company and Subsidiary Company

Section 2(46) of the Companies Act, 2013 defines a Holding Company as

In relation to one or more other companies, means a company of which such companies are subsidiary companies.

Section 2(87) of the Companies Act, 2013 define a Subsidiary Company as

In relation to any other company (that is to say the holding company), means a company in which the holding company (i) Controls the composition of the Board of Directors; or (ii) Exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies


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