MEANING 0F COMPANY:
The word ‘company’ is derived from the Latin word ‘com’ i.e. with or together and ‘panis’ i.e. bread. Originally the word referred to an association of persons or merchant men discussing matters and taking food together. However, in law ‘company’ is termed as company which is formed and incorporated under the Companies Act, 2013 or an existing company formed and registered under any of the previous company laws. As per this definition of law, there must be group of persons who agree to form a company under the law and once so formed, it becomes a separate legal entity having perpetual succession with a distinct name of its own and a common seal. Its existence is not affected by the change of members.
The word ‘company’ is derived from the Latin word ‘com’ i.e. with or together and ‘panis’ i.e. bread. Originally the word referred to an association of persons or merchant men discussing matters and taking food together. However, in law ‘company’ is termed as company which is formed and incorporated under the Companies Act, 2013 or an existing company formed and registered under any of the previous company laws. As per this definition of law, there must be group of persons who agree to form a company under the law and once so formed, it becomes a separate legal entity having perpetual succession with a distinct name of its own and a common seal. Its existence is not affected by the change of members.
According to justice
Marshall of USA “A corporation is an artificial being, invisible, intangible
and existing only in the contemplation of law.”
Salient feature of a company:
(a) Incorporate Association;
(b) Separate legal Entity;
(c) Perpetual Existence
(d) Common seal;
(e) Limited liability;
(f) Distinction between ownership and
management;
(g)Not a citizen;
(h) Transferability of shares;
(i) Maintenance of books;
(j) Periodic Audit;
(k)Rights of access to information.
Types of company:
1. GOVERNMENT COMPANY: According to
Section 2(45) of the Companies Act, 2013, “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 company of such a Government
company.
2. FOREIGN COMPANY: According to Section 2 (42)
of the Companies Act, 2103, “Foreign company” means any Company or body corporate incorporated
outside India which –
(a) has a place of business in India whether by itself or through an agent physically or through electronic mode.
(b) conducts any business activity in India in any other manner.
(a) has a place of business in India whether by itself or through an agent physically or through electronic mode.
(b) conducts any business activity in India in any other manner.
3. PRIVATE COMPANY:
Section 2(68) of the Companies Act, 2013 defines ‘Private company’ as a company having a minimum paid-up share capital of 1 lakh rupees or such higher paid-up share capital as may be prescribed, and which by its articles,—
(i) Restricts the right to transfer its shares.
(ii) Except in case of One Person Company, limits the number of its members to two hundred:
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this sub-clause, be treated as a single member:
Provided further that ;-
(A) persons who are in the employment of the company.
Section 2(68) of the Companies Act, 2013 defines ‘Private company’ as a company having a minimum paid-up share capital of 1 lakh rupees or such higher paid-up share capital as may be prescribed, and which by its articles,—
(i) Restricts the right to transfer its shares.
(ii) Except in case of One Person Company, limits the number of its members to two hundred:
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this sub-clause, be treated as a single member:
Provided further that ;-
(A) persons who are in the employment of the company.
(B)
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, shall not be included in the number of
members.
(iii) prohibits any invitation to the public to subscribe for any securities of the company. Shares of a Private Company are not listed on Stock Exchange.
(iii) prohibits any invitation to the public to subscribe for any securities of the company. Shares of a Private Company are not listed on Stock Exchange.
4. PUBLIC COMPANY: Section 2(71) of the Companies Act, 2013 defines Public Company as a
company which— (a) is not a private company; (b) has a minimum
paid-up share capital of five lakh rupees or such higher paid-up capital, as
may be prescribed: Provided that a company which is a subsidiary of a company,
not being a private company, shall be deemed to be public company for the
purposes of this Act even where such subsidiary company continues to be a
private company in its articles.
6. SMALL COMPANY:
Section 2(85) of the Companies Act, 2013 defines “Small company” means a company, other than a public company, -
(i) Paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than five crore rupees; or
(ii) Turnover of which as per its last profit and loss account does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees:
7. LISTED COMPANY:As per Section 2 (52) of the Companies Act, 2013, “listed company” means a company which has any of its securities listed on any recognised stock exchange. The company, whose shares are not listed on any recognized stock exchange, is called ‘‘Unlisted Company” . In case of private companies, shares are not listed in any stock exchange.
8. UNLIMITED COMPANY: Section 2 (92) of the Companies Act, 2013 defines Unlimited company” means a company not having any limit on the liability of its members.
Section 2(85) of the Companies Act, 2013 defines “Small company” means a company, other than a public company, -
(i) Paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than five crore rupees; or
(ii) Turnover of which as per its last profit and loss account does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees:
7. LISTED COMPANY:As per Section 2 (52) of the Companies Act, 2013, “listed company” means a company which has any of its securities listed on any recognised stock exchange. The company, whose shares are not listed on any recognized stock exchange, is called ‘‘Unlisted Company” . In case of private companies, shares are not listed in any stock exchange.
8. UNLIMITED COMPANY: Section 2 (92) of the Companies Act, 2013 defines Unlimited company” means a company not having any limit on the liability of its members.
9. COMPANY LIMITED BY SHARES: As per Section 2(22) of the Companies Act, 2013, “Company limited by shares” means a company having the
liability of its members limited by the memorandum to the amount, if any,
unpaid on the shares respectively held by them.
10. COMPANY LIMITED BY GUARANTEE: As per Section 2(21) of the Companies Act, 2013, “company limited by guarantee” means a company having the
liability of its members limited by the memorandum to such amount as the
members may respectively undertake to contribute to the assets of the company
in the event of its being wound up.
11. HOLDING COMPANY: According to Section 2 (46) of the Companies Act,
2103, “Holding
company”, in
relation to one or more other companies, means a company of which such
companies are subsidiary companies.
12. SUBSIDIARY
COMPANY:Section 2(87) of the Companies Act, 2013 defines “subsidiary company” as 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:
A company shall be deemed to be a subsidiary company of the holding company even if there is indirect control through the subsidiary company(ies). The control over the composition of a subsidiary company’s Board of Directors means exercise of some power to appoint or remove all or a majority of the directors of the subsidiary company.
