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A business (also known as enterprise or firm) is an organization engaged in the trade of goods, services, or both to consumers.

Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit or state-owned. A business owned by multiple individuals may be referred to as a company, although that term also has a more precise meaning. Basic forms of ownership Although forms of business ownership vary by jurisdiction, several common forms exist: Sole proprietorship: A sole proprietorship is a business owned by one person for-profit. The owner may operate the business alone or may employ others. The owner of the business has unlimited liability for the debts incurred by the business. Partnership: A partnership is a business owned by two or more people. In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business. The three typical classifications of for-profit partnerships are general partnerships, limited partnerships, and limited liability partnerships. Corporation: A corporation is a limited liability business that has a separate legal personality from its members. Corporations can be either government-owned or privately owned, and corporations can organize either for-profit or not-for-profit. A privately owned, for-profit corporation is owned by shareholders who elect a board of directors to direct the corporation and hire its managerial staff. A privately owned, for-profit corporation can be either privately held or publicly held. Cooperative: Often referred to as a "co-op", a cooperative is a limited liability business that can organize for-profit or not-for-profit. A cooperative differs from a for-profit corporation in that it has members, as opposed to shareholders, who share decisionmaking authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy. Classifications • Agriculture and mining businesses are concerned with the production of raw material, such as plants or minerals. • Financial businesses include banks and other companies that generate profit through investment and management of capital. • Information businesses generate profits primarily from the resale of intellectual property and include movie studios, publishers and packaged software companies. • Manufacturers produce products, from raw materials or component parts, which they then sell at a profit. Companies that make physical goods, such as cars or pipes, are considered manufacturers. • Real estate businesses generate profit from the selling, renting, and development of properties comprising land, residential homes, and other kinds of buildings. • Retailers and distributors act as middle-men in getting goods produced by manufacturers to the intended consumer, generating a profit as a result of providing sales or distribution services. Most consumer-oriented stores and catalog companies are distributors or retailers.

jointstock company. fund. other businesses. In the United States. trust. and by its articles. or similar official. The name company arose because. TYPES OF COMPANIES 1. the company. partnership. association. group or association of persons can be made to exist in law and then a company is itself considered a "legal person". Utilities produce public services such as electricity or sewage treatment. be treated as a single member. or debentures of. or liquidating agent. at least originally.• • • Service businesses offer intangible goods or services and typically generate a profit by charging for labor or other services provided to government. or consumers. were members of the company while in that employment and have continued to be members after the employment ceased. This group has a common purpose or focus and an aim of gaining profits. Provided that where two or more persons hold one or more shares in a company jointly. . restaurants. having been formerly in the employment of the company. for any of the foregoing. or organized group of persons. a company is not necessarily a corporation. and d) prohibits any invitation or acceptance of deposits from persons other than its members. This collection. whether incorporated or not. they shall. it represented or was owned by more than one real or legal person. Organizations ranging from house decorators to consulting firms." In the US. "Private company" is defined in section 3(1)(iii) of the Act and it means a company which has a minimum paid-up capital of one lakh rupees or such higher paid-up capital as may be prescribed. trustee in bankruptcy. and even entertainers are types of service businesses. b) limits the number of its members to fifty (50) not including — • • persons who are in the employment of the company. for the purposes of this definition. and persons who. Transportation businesses deliver goods and individuals from location to location. and c) prohibits any invitation to the public to subscribe for any shares in. A company is a business organization. a) restricts the right to transfer its shares. directors or their relatives . and (in an official capacity) any receiver. generating a profit on the transportation costs. a company may be a "corporation. usually under a government charter. who each provide some form of capital. if any. It is an association or collection of individual real persons and/or other companies.

Within 30 days of establishment of such place of business within India. Alterations and changes in these documents/details are required to be notified within 30 days. or by any State Government or Governments. etc. 124 to 145 (registration of charges). "Public company" is defined in section 3(1)(iv) of the Act and it means a company which — a) is not a private company. .). 295 (loans to Directors). 234 to 246 (power of Registrar to call for information. 297 (Board’s sanction to be required in certain contracts in which Directors are interested). the Central Government may. the Foreign Company is required to submit documents/details under section 592. 159 (annual returns to be made by company). or Shall apply to any Government company. c) is a private company which is a subsidiary of a company which is not a private company. only with such exceptions. The provisions of Section 108C on restrictions of transfer of shares of foreign companies. As provided by section 620(1) of the Act. as may be specified in the notification. "Government company" is defined in section 617 of the Act and it means any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government. 3. modifications and adaptations. "Foreign company" is defined in section 591 of the Act and it means a company which a) is incorporated outside India and b) has established a place of business within India. apply to such foreign company. 209A (inspection of books of account of company). 4. sections 118 (right to obtain copies of trust deed). or partly by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government company as thus defined. by notification in the Official Gazette. 619 and 619A specified in the notifications:— Shall not apply to any Government company.2. as may be prescribed. 209 (books of account to be kept by company). 233A (power of Central Government to direct special audits in certain cases). direct that any of the provisions of this Act (other than sections 618. 233B (audit of cost accounts in certain cases). b) has a minimum paid-up capital of five lakh rupees or such higher paid-up capital.

d) manufacture. The Memorandum and Articles of Association of such companies are as per Tables C and D of Schedule I of the Act. pooling. drying. 6. The liability of a member extends to the whole amount of company’s debts and liabilities but the member will be entitled to claim contribution from other members. e) providing education on the mutual assistance principles to its members and others. f) rendering technical services. "Company limited by guarantee" is defined in section 12(2)(b) of the Act and it means a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake by the memorandum to contribute to the assets of the company in the event of its being wound up. distilling. 7. Section 581B • The objects of the producer company shall relate to all or any of the following matters. equipment or consumables mainly to its members. c) processing including preserving. research and development and all other activities for the promotion of the interest of its members. b) Provided that Producer Company may carry on any of the activities specified in this clause either by itself or through other institution. handling. . harvesting. "Producer Company" is defined in section 581A of the Act and it means a body corporate having objects or activities specified in section 581B and registered as Producer Company under this Act. Such company could be a "company limited by guarantee and not having share capital" or a "company limited by guarantee and having a share capital". consultancy services.5. respectively. namely— a) production. sale or supply of machinery. brewing. vinting. export of primary produce of the Members or import of goods or services for their benefit. selling. marketing. The Memorandum and Articles of such company is as per Table E of Schedule I of the Act. training. grading. canning and packaging of produce of its members. "Unlimited Company" is defined in section 12(2)(c) of the Act and it means a company not having any limit on the liability of its members. procurement.

the Central Government may. . science. Companies with licence under section 25 a) Where it is proved to the satisfaction of the Central Government that an association— • • is about to be formed as a limited company for promoting commerce. l) financing of procurement. ancillary or incidental to any of the activities referred to in clauses (a) to (i) or other activities which may promote the principles of mutuality and mutual assistance amongst the members in any other manner. processing. The association may thereupon be registered accordingly and on registration shall enjoy all the privileges and (subject to the provisions of this section) be subject to all the obligations. • Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section. clubs or chambers of commerce. transmission and distribution of power. marketing or other activities specified in clauses (a) to (j) which include extending of credit facilities or any other financial services to its members. art. or other income in promoting its objects. i) promoting techniques of mutuality and mutual assistance. their use. revitalisation of land and water resources. charity or any other useful object. k) any other activity.g) generation. without the addition to its name of the word "Limited" or the word "Private Limited". 8. j) welfare measures or facilities for the benefit of members as may be decided by the Board. and to prohibit the payment of any dividend to its members. • • b) The Central Government has conferred powers under section 25(6) to exempt or modify certain provisions of the Act in relations to such companies. religion. h) insurance of producers or their primary produce. direct that the association may be registered as a company with limited liability. if any. by licence. Such companies are generally associations. and intends to apply its profits. conservation and communications relatable to primary produce. of limited companies.

or that other — i. subject to the provisions of subsection (3).Annual Accounts of all the subsidiaries to be attached with the Annual Accounts of the holding company (Sec. a) For the purposes of this Act. Provisions affecting holding subsidiary relationship a) Holding company as shadow Director (under Sec. 2(47) "subsidiary company" or "subsidiary" means a subsidiary company within the meaning of Section 4 of the Act. a company shall. Holding & Subsidiary Company According to Sec. be deemed to be a subsidiary of another if. 239 & 247) . 214) f) Investigation of the affairs of the Subsidiary’s Holding Company (Sec.9. where the first-mentioned company is an existing company in respect of which the holders of preference shares issued before the commencement of this Act have the same voting rights in all respects as the holders of equity shares. or ii. but only if— • • that other controls the composition of its Board of directors. where the first-mentioned company is any other company. • the first-mentioned company is a subsidiary of any company which is that other’s subsidiary. exercises or controls more than half of the total voting power of such company. Sec. 4 of the Act states. 213) e) Rights of Holding Company’s representatives & members (Sec. According to Sec. 7) b) Subsidiary’s membership of its Holding company (Sec. holds more than half in nominal value of its equity share capital.g. 42 & 372A) c) Obligation on the part of holding company to furnish certain information to its shareholders about the subsidiary e. 212) d) Financial year of Holding & Subsidiary Company (Sec. 2(19) "holding company" means a holding company within the meaning of section 4 of the Act.

None of the Directors are traceable. LLPs are bound to pay Income Tax under IT Act on lines similar to general partnerships. 11. 2008".10. 2008 as a "partnership formed and registered under the Limited Liability Partnership Act. Vanishing Companies (applicable in case of Public Listed Companies) A Vanishing Company is one which has • • • Failed to file returns with Stock Exchange (if listed) & with ROC for 2 years. They are not required to pay dividend distribution tax or surcharge. 1956 but it is defined under section 2(1)(n) of the Limited Liability Partnership Act. Not maintaining the registered office at the address provided with ROC & Stock Exchange. Limited Liability Partnership (LLP) It may be noted that LLP is not a Company under the Companies Act. .