8 KINDS OF COMPANIES of companies:are as follow: The different kinds | according to Incorporation a, Chartered Company : b. Statutory Company ¢. Registered Company gd. Foreign Company 2, According to Liability a. Company Limited by Shares b. Company’ Limited by Guarantee, c. Unlimited Company According to Ownership and Control a. Private Company sb, Public company. c. Public Sector Company d. Holding Company and Subsidiary Company e. Associated Company ‘4, According to’ Companies Act, 2017 a. Public Interest Company b. Large Sized Company c. Medium Sized Company d.. Small Sized Company 5. Miscellaneous a. Association not for Profit b. Shariah Compliant Company c, Free Zone Company d. Agriculture Promotion Company e. Illegal Association 4. According to Incorporation , The companies.are classified according to incorpor 57 ation as follows: Scanned with CamScannerDRE a es eee Kinds of Compania, 58. ‘a. Chartered Company Kine "A company which is formed under a special charter granted by the Kir = or Queen is called a chartered company. The powers, liabilities and inatias ot the) wir business of such company are explained by the charter. Britis! : a india Mu Company and Chartered Bank of Australia are examples 0 lartereq lim companies. A chartered company does not exist in Pakistan. ea b, Statutory Company ; ‘A company which is formed by a special Act of the Parliament by order ur of the head of the state is called a statutory company: It's ee ye Act]. pe under which it is formed, The Act defines the powers, liabilities an a3 iviies of the company. It is usually formed to provide services to the public and not to earn s PDA are examples of statutory 4 profit. The State Bank of Pakistan and WAT companies. c. Registered Company ; . =. A company which is formed under. the Companies Act, a eecateds registered company. It also’ includes existing companies ret under alg nies Act, 2017 and the previous laws. It gets powers from the Compal memorandum of company. Examples of registered company are Packages. Limited and Millat Tractors Limited. d. Foreign Company A foreign company means any company Which has a place of .business or office in companies in Pakistan are Coca Cola, Shell Petroleum, etc. 2. According to Liability Companies are classified according to liability as follows: a. Company Limited by Shares A company limited by shares means a company in which the liability of members is limited up to the nominal value of shares held by them. [Sec. 2(1)(20)) “ The memorandum states that the liability of the members is limited. Such company must’add the word ‘Limited at the end of its name. Examples of company limited by shares are DG Khan Cem ‘ i Chemical Industries Ltd. (Sec. 27] ene Eds and b. Company Limited by Guarantee Accompany limited by guarantee m . members is limited to such fixed amount vihioh members. ne HheleDity to the assets of the company in cas indi ers undertake to contribute yin case of winding up. [Sec. 2(1)(19)] The memorandum states. that liabili at liability i company must at | eee im au a dd the words (Guarantee) Limited’ ea os : its na y incorporated outside Pakistan Pakistan. Examples. of foreign [Sec. 2(1)(35)] Scanned with CamScanner“got ~~ 59 guaranteed amount at the time of (Guarantee) Limited and Asian - re examples of companies Kinds of Companies. = The members-are liable to pay the winding up. Pakistan Mutual Insurance Company Mutual Insurance Company (Guarantee) Limited al limited by guarantee. ¢. Unlimited Company . _ Unlimited company means a company in unlimited. It means that the personal assets of th pay the debts of the company. [Sec. 2(1)(71)] a The memorandum states that the liability of the members is unlimited: Such company shall add the word ‘Unlimited’ as last words of its name. [Sec. 29] 3. According to Ownership and Control oo The following are kinds of companies according to ownership and control: a. Private Company : 5 "A private company meané a company which by its articles: [Sec. 2 (1)(49)] : : i. Restricts the right to transfer its shares. ii. Limits the number of its members to 50, not including persons who are. in employment of the company, and Prohibits any invitation to the public to subscribe for the shares, debentures or redeemable capital of the company. - ‘An example of private company is Bahria Town (Pvt.) Ltd. If a private company is formed by a single member, it is called a single member company (SMC). b. Public Company ‘A public company means a company which ‘is not a private company. It means that the. company may invite the public to subscribe for its shares or debentures. At least 3 members are required to form a public company. There is no maximum limit of members in a public company. A public company may be aoe or. dpa A listed company is one which is listed with the stock exchange. A non-listed company is not listed with the stock exchange. [Sec. 2(1)(52)] - os ¢. Public Sector Company A public sector company, whether i i : 2(1)(84] public or private, means: [Sec. i. Accompany controlled and owned by the Government. W , company in which the Government holds at least 51% of voting power. iii. A company in which the Government hi int majority of its directors. Srey tee ee iv. A public sector association not for profit. which the liability of members is e shareholders can be used to iii. Scanned with CamScanner? ; Kinds of Companies n and State Cement = ie National Fertilizer Corpor Examples include : Corporation (Private) Ltd. ' a. eae Se cor company that ea ng coronen of ial ‘i if another co! fs res Ol poard or controls more than 50% voting shares © aon d is control A company whose composition of board | aaa conics voting shares ony held by the holding company 'S called a subsidiary company, ter example, Engro Polymer and Chemicals Limited is subsidiary of Engro Corporation. [Sec. 2(1)(68)] ‘ e. Associated Company an Two or more: companies or unde! if they are connected in the following man If a person who. is an owner, partner or voting power in a. company is also the owner, Pi least 20% voting power in another company. If companies are under common management or control ili, If a company is subsidiary of another company. iv. If the undertaking is a Modaraba managed by a company. jated Undertaking - id ec are considered to be associated ner: [Sec. 2(1)(4)) director or controls at least. 20% . artner or director or controls at 4. According to Companies Act, 2017 The following are kinds of companies according to the Third Schedul the Companies Act, 2017: [Sec. 224] a. Public Interest Company It includes the following: i. Listed Company ii. Non-listed company which is: «- A public sector company; or © A public utility company ‘carrying on the business of essential. public service; or «Holding assets for a group of outsiders such as a b; i al company, securities broker, pension fund, mutual fund wa insurance banking entity. F investment * Having such number of members holding ordi notified. nary shares as may be * ‘Holding assets exceeding such value as may be notif b. ‘Large Sized Company es It includes the following: i. Non-listed company with: le of Scanned with CamScannerot Kinds of Companies jon or more;.OF Paid-up capital of Rs. 200 + Tumover of Rs. 1 billion or more; OF + Employees more than 750 : ii. Foreign company with turnover of Rs. 1 billion or more. ii, Non-listed company formed under Section 42 of 45 havi revenue including other income of Rs. 200 million and above- c. Medium Sized Company It includes the following: i. Non-listed public company with: + Paid-up capital less than Rs.20 + Tumover less than Rs1 billion «Employees less than 750 g annual gross : 0 million ji. Private company with: ; * Paid-up capital of greater than Rs. 10 million put not exceeding Rs- 200 million ; “. Turnover greater than Rs. 100 million-but not exceeding Rs: 1 billion + Employees more than 250 but less than 750 ii, A foreign company which has turnover less than RS. billion. nual gross: rmed under Section 42 or 45. having ant iv. Non-listed company fo s than Rs.200 million. revenue including other income of les: d. Small Sized Company A private company with: i. -Paid-up capital up to Rs. 10 million Turnover not exceeding Rs.100 million iii, Employees not more than 250 5. Miscellaneous Association not for Profit The Commission may regist following conditions: It shall-be formed to promote commerce, art, science, religion, health, education, research, sports, protection of environment, social welfare, charity or any other useful object. It shall apply its profits to promote its objects. It Shall not pay dividend to its members. iv. Its objects and activities shall not be against the laws, public 7 sovereignty and national interests of Pakistan. ae order, security, » ter an association not for profit under the Scanned with CamScannerKinds of Companies imited company, without ame. Lahore Waste it. [Sec. 42] 2 public li d’ to its. jation may be registered as a .d not for prof (Guarantee) Limite ‘ample of associatet "The associ adding the word ‘Limited’ or .( _ Management Company is an ex: : . Shar Compliant Company . is conducting i 7 snatiah compliant company means a company i is ig its business according to the principles of Shariah. [Sec. 21) c, Free Zone Company 7 esi A company incorporated for the purpose of carrying on ee pty tthe export processing zone or an area notified by the Governet MS i Suez cn at enjoy exemptions under the Act. Such company must add ae iese the end of its name, The Commission may, for protection of for su ivestors, restrict the disclosure of information regarding promoters, shareho ni directors of the company who are foreign nationals. [Sec. 454] d. Agriculture Promotion Company 3: 4% : ‘A company related to. produce for agriculture: promotion or engaged in any activity connected -with produce or other related activities is. called an agriculture promotion company. Produce includes agriculture, animal husbandry, forest products, re-vegetation, bee raising and farming plantation products. [Sec. 457] e. Illegal Association Any association, partnership or’ company consisting of more than 20 members is illegal unless it is registered as a company under the Companies Act, 2017. [Sec 9] It does not’apply in the following cases: Any society, body or association formed under any other Pakistani law. ii. A joint family carrying on joint family business. ili. A partnership of two or more joint families where: total membe: i minors, does not exceed 20. s, excluding iv. A partnership formed to carry on practice as lawyers, ac other profession. . "accountants or any Every member of an illegal association is personally |i ate, incurred in the business and liable to a penalty not extending au {or all abilities QUESTIONS 1. Explain the kinds of companies according to incorporation, 2. Explain the kinds of companies according to liability, 3. Explain the kinds of companies according to Ownershi; 4 Explain the kinds of ‘companies according to the Cor ID and Control. Panies Act, 2017, Scanned with CamScanner