Companies act 1956

Definition
Companies act defines as A company

formed and registered under this act or an

existing company
An Existing company means a company
formed and registered under any of the
former companies act.

Characteristics of a Company
Incorporated Association
Artificial Person
Separate Legal Entity
Limited Liability
Perpetual Existence
Common Seal
Capacity to Sue
Separate Property
Transferability of Shares

Classification of Companies
On the basis of Incorporation:

1)Chartered Companies:-Special charter granted by The King or

Queen eg. East India Company
2)Statutory Companies:-Companies formed by special act of
Parliament eg. Reserve Bank of India
3)Registered Companies:-Companies which are incorporated
under companies act 1956
On the basis of Liability
1) Limited Companies: Liability is limited to the extent of a face
value of a share held by them
2)Unlimited Companies:-any 7 or more persons (2or more in pvt
company)every member is liable for the debts of the company
3)Guarantee Companies:-Liability of the member is limited to a
fixed amount which member contributes to the asset of the
company in case of its winding up

Ctd.
On the basis of Control:-

1)Holding Company of another company if it has control

over that other company
2)Subsidiary Company:-Control is exercised by the latter
Controlling the composition of board of directors
Holding of majority of shares
Subsidiary of another subsidiary.
On the basis of Ownership
1)Government Company -atleast 51% of the paid-up share
capital is held by the government or central govt .
2)Foreign Company -any company incorporated outside
India which has a place of business in India

Ctd.
On the basis of Members :-

1)Private Company-one which by Article of

Association
Restricts the right of the member to transfer shares
Limits the number of members to 50 excluding past
or present employees
Prohibits any invitation to the public to subscribe
for its shares or Debentures.
2)Public Company-company which is not a private
company
Vice-versa