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Types of Companies in India

Types of Companies

Over the years, company forms of business have grown incredibly popular. They have grown to become so many different kinds of businesses. Businesses must be categorized based on their liabilities, members, and control. Let us know about different types of Companies in this article. But, First we need to know what is a Company?

What is a Company?

A corporation, often known as co., is a legal entity that stands for a group of people with a certain goal who are either natural, legal, or a combination of the two. Members of the company work together for a shared cause in order to accomplish clearly stated objectives. Businesses come in many shapes, including:

  • nonprofit groups may be included in voluntary associations.
  • business organisations whose goal is to make money
  • Banks and financial institutions
  • services or educational establishments

So that the company itself has limited liability as members fulfil or fail to fulfil their obligations in accordance with the publicly stated incorporation, or published policy, a company may be established as a legal entity. It may be necessary to liquidate a firm after it closed in order to discharge any outstanding debts.

Corporate groupings are the ensuing entities that develop when corporations join forces and register themselves as new businesses.

Now let us know about the types of Companies. Following are the types of Companies:

Types of Company Under Companies Act, 2013

The Companies Act, 2013 (the “Act”) in India allows business owners to register a variety of companies to conduct their operations and give their companies a legal framework. The following list includes the many company types:

1. Types of Companies: One Person Company

The One Person Business concept was introduced by the Act (OPC). According to the Act, an OPC is a business with just one member. The company’s director may also be a member. Although there should only be one member of the OPC, there can be up to fifteen directors.

2. Types of Companies: Private Limited Company

A private limited business is one that has a membership cap of 200 people. A private limited corporation must have at least two members in order to be incorporated. It is appropriate for companies that choose to register as private corporations because the members cannot transfer their share. In a private limited company, there must be a minimum of two directors and a maximum of 15 directors.

3. Types of Companies: Public Limited Company

A company that allows the general public to own company shares is referred to as a public limited corporation. A public limited company may have as many shareholders as it chooses, but it must have a minimum of seven members to become incorporated. The number of directors for the corporation must be at least two and never exceed fifteen.

4. Types of Companies: Section 8 Company (NGO)

Section 8 of the Act permits a group of people or an individual to register a corporation for charitable purposes. These businesses were founded in order to further business, social welfare, charitable giving, environmental preservation, science, art, education, sports, and other endeavours. The business should use its earnings to advertise its initiatives. These businesses seek to forbid their members from receiving any dividend payments.

Types of Companies Based on Size

According to their size, businesses are categorised under the MSME Act so that MSMEs can get government advantages. To qualify for MSME benefits, businesses are divided according to size as follows:

1. Types of Companies: Micro Companies

A micro firm is one whose annual turnover does not exceed Rs. 5 crore and whose investment in equipment and machinery does not exceed Rs.

2. Types of Companies: Small Companies

A small business is one whose annual turnover does not exceed Rs. 50 crore and whose investment in equipment and machinery does not exceed Rs. 10 crore.

The Companies Act of 2013 offers small businesses a number of advantages as well. Under the Companies Act, a company is deemed a minor company if its paid-up share capital is less than Rs. 2 crore and its annual revenue is less than Rs. 20 crore.

3. Types of Companies: Medium Companies

A company is considered to be medium-sized if its annual turnover does not exceed Rs. 250 crore and its investment in equipment and machinery does not exceed Rs. 50 crore.

Other Types of Companies

1. Types of Companies: Company Limited by guarantee (CLG)

employed frequently in cases where businesses are established for charitable or club-related causes rather than for profit. The members have no economic rights in connection to the firm other than to guarantee the payment of a few (often insignificant) sums in the event of insolvent liquidation. This kind of business is typical in England. A corporation limited by guarantee may have capital in the form of shares or not.

2. Types of Companies: Company Limited by shares

the most typical configuration of a company employed in business endeavours. Corporations are “the most typical example of a limited company,” which is defined as “a company in which the liability of each shareholder is restricted to the amount individually invested.” This kind of business is prevalent in England and many other English-speaking nations. A business limited by shares may be either privately held or publicly traded.

3. Types of Companies: Company Limited by guarantee with a share capital

A hybrid entity is typically employed when a corporation is established for charitable purposes but its operations are partially supported by investors who anticipate a profit. Although there are still legal requirements that allow for the existence of this type of corporation, they are no longer permitted to be formed in the UK.

4. Types of Companies: Limited Liability Company

a firm with limited liability, member or manager management, and restrictions on ownership transfer that is legally permitted in some states Because it combines the qualities of a corporation and of a partnership or sole proprietorship, the LLC form has been referred to as hybrid. As a corporation, it has limited responsibility for shareholders, and it must be registered to have flow-through taxation to the members. Dissolved if a member dies or declares bankruptcy

5. Types of Companies: Unlimited Company with or without a share capital

a hybrid entity, a business in which shareholders’ or members’ liability for the debts (if any) of the business is unrestricted. The veil of incorporation doctrine does not apply in this situation.

6. Types of Companies: Companies formed by letters patent

The majority of businesses by letters patent are corporations sole, not companies in the modern sense of the word.

7. Types of Companies: Charter Corporations

These were the only types of companies prior to the adoption of contemporary company regulation. Apart for very old companies that still exist, of which there are still many, especially many British banks, or modern societies that provide a quasi-regulatory function, they are now rather uncommon.

8. Types of Companies: Statutory companies

Today, it is rather uncommon for a company to be established by a private act passed in the appropriate jurisdiction.

Schedules of Indian Constitution- Trick to Remember List

Types of Companies: Some Important Facts

  • A limited corporation is indicated by the suffix “Ltd,” and a “PLC” (public limited company) denotes that its shares are widely held.
  • The proprietors of a corporation are typically referred to as “members” in a legal environment.
  • This will be the shareholders in a corporation that is limited or unlimited by shares.
  • This will be the guarantors of a corporation limited by guarantees.
  • In an effort to draw business to their jurisdictions, certain offshore countries have developed unique types of offshore corporations.
  • Segregated portfolio businesses and restricted purpose companies are two examples.
  • Nonetheless, there are numerous subcategories of company kinds that can be established in different legal systems around the globe.
  • Public firms and private companies are occasionally differentiated between for legal and regulatory considerations.
  • Public companies are businesses whose shares may be traded publicly, frequently (but not always) on a stock exchange that imposes listing requirements/Listing Rules as to the issued shares, the trading of shares, and future issue of shares to support the reputation of the exchange or specific market of an exchange.
  • Private corporations frequently place limits on the transfer of shares and do not have publicly traded shares.
  • Private firms may have a maximum number of shareholders in various jurisdictions.

The second company is regarded as a subsidiary of the parent company when the former has sufficient voting shares in it to influence or elect its board of directors, thereby controlling management and operations. The definition of a parent company varies by jurisdiction and is typically established by the laws that apply to corporations in that jurisdiction.

PCS Full Form- State Provincial Civil Service

105 Amendment of Indian Constitution, PDF, Date & Year


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How many kinds of company are there?

According to Indian law, there are seven different sorts of entities that might exist: partnerships, limited liability companies, sole proprietorships, private limited companies, and public companies (LLP). The most popular business structure is a private limited corporation.

What is the classification of company?

Private and public companies are the two main categories of businesses. Private firms, often known as private limited companies, are closely held businesses with fewer than 200 shareholders. Limited corporations that are publicly traded on a stock exchange and have more than 200 shareholders are known as public companies.

What is company and its types?

A group of people can get together to form a corporation, which is a legal body used to conduct and manage commercial or industrial business operations. The business lines of an organisation rely on its structure, which can be a corporation, a partnership, or even a sole proprietorship.

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