Types of Company

1. Private company
2. chartered company
3. public company
4. statutory company
5. registered company
6. holding and subsidiary company
7. government company and
8. foreign company
 Private Company

.A company registered as to the company law as private entity which

is privately owned by its founders, management or a group of private
investors and it can not issue share publicly. It means that such
company cannot offer shares for sale in the stock market.
.As to the Companies Act 2006, the number of shareholders of a
private company shall not exceed fifty (1-50).
.All limited companies should submit an 'Annual Return' to Registrar
Office each year as well as their annual accounts.
.In Nepal, person desirous of incorporation for a private company has
to submit a copy of consensus agreement, if any, entered into.
.Foreigners are not allowed to invest in proprietorship or partnership
firms.
 Basic Features of Private Company
1.Limits the number of its shareholders from 1 to 50,
excluding persons who are in the employment of the
company, and
2.Prohibits any invitation to the public to subscribe in its
shares.
3.Private company does not have any minimum capital
requirements.
4.Private Co. does not require company secretary.
5.Maximum umber of shareholders to be given in the MOA.
 Chartered Company
• CHARTERED COMPANIES played an important part in the colonization
of the
New World, though they did not originate for that purpose. By
the sixteenth century the joint-stock company already existed in
many countries as an effective means of carrying on foreign
trade, and when the New World attracted the interest of
merchants, investors formed companies to engage in
transatlantic trade.
• It is the one which is incorporated under the special charter
granted by the king or queen of England in exercise of
prerogative power e.g. East India Company, Bank of England and
Standard Chartered Bank. They are governed by provisions of the
special charter under which they are formed.
 Public Company
Public companies are those businesses owned
by individuals (and not by a government). If a
public company is a corporation whose stock is
traded on a stock exchange it is said that the
stock is publicly traded or that the company is a
publicly-traded corporation.
 Provisions in the Company Act 2063
Subject to the proviso to Sub-section (2) of section 3 of the Companies Act 2006,
the number of shareholders of a public company shall be seven in minimum and
a maximum of any number.
A public company, on the other hand, is a company that has sold a portion of
itself to the public via an initial public offering of some of its stock, meaning
shareholders have claim to part of the company's assets and profits. It is
necessary of the disclosure for the financial information in case of the public
company.
Public company may, therefore, can be defined as an association of persons
consisting of not less than the members as provisioned in the statute, which is
registered therein.
(a)is not a private company;
(b)has a minimum paid-up capital of said amount, as may be prescribed 10 million.
 The Basic Features of Public Company
1.Has a minimum number of 7 shareholders (there is no maximum limit).
2.Offers shares and debentures to the public through a prospectus which
complies with the requirements of the Companies Act 2006 and Securities Act
2007.
3.A minimum paid up capital of 10 Million Nepalese Rupees is required to
register a public limited company.
4.Recruitment of Company Secretary is compulsory.
5.Banking and Financial institutions, insurance, mutual fund, Retirement
Fund, Capital market related company should be registered as a public
company,
6.If number of shareholders of private company surpass 50 the company
should change to public company,
7.Must publish the details of the company DETAILS (Bibaranpatra) in the time
of public issue of share capital.
8.Can raise debenture.
 Foreign Company
• A foreign company is one which is incorporated under the
outside the country.
• No foreign company shall carry on any Business or transaction
in the Nepal without having a branch office of such company
registered with the office of such company registered with the
office pursuant to this Section or establishes such office
without having a liaison office registered as to the section 154
of the Act. The arrangement about the foreign company is
made from section 154 to 158 in Chapter 16.
 Contd…
(2) A foreign company desiring to have its branch office registered pursuant to
Sub-section (1) shall make to the Office an application, accompanied by the
permission obtained from the concerned body pursuant to the prevailing law,
and the prescribed fees and in such format as prescribed, for the registration
of such company.
(3) A foreign company desiring to have its liaison office registered pursuant to
Sub-section (1) shall make to the Office an application, accompanied by the
permission, if any, required to be obtained from the concerned body pursuant
to the prevailing law for the registration of such office, and the prescribed fees
and in such format as prescribed, for the registration of such company.
(4) On receipt of an application made for the registration of a foreign
company pursuant to Sub-section (2) or (3), the Office shall make necessary
inquiry, register such company and give the registration certificate, as
prescribed, no later than thirty days after the making of the application for
carrying on a business or transaction in or establishing a liaison office in Nepal.
 Contd…
(6) A foreign company registered pursuant to
Sub-section (4) may open its branch office
and carry on the concerned business or
transaction in or open its liaison office in the
Nepal. Provided, however, that a foreign
company registered as a liaison office shall
not be entitled to do any income earning
activity in Nepal.
 Statutory company

A company which is incorporated under the special Act by legislature.

The terms statutory authority and statutory agency are generally interchangeable in most
jurisdictions. These "public service" bodies are usually found in countries that follow the British
style of government (such as Australia, New Zealand, etc). In the UK, these statutory
authorities are often generically nicknamed "quangos" because of their semi-autonomous
nature. (Quango is short for quasi non-governmental organisation.)
A statutory authority/agency is set up by specific legislation (referred to as "the original
legislation" or "the enabling legislation). This authorises the body to enact legislation on behalf
of the state. These subsidiary or delegated legislation are usually formally known as
"Regulations" and/or "Rules."
The rationale for doing this (that is, parliament delegating the power to enact laws to a
statutory authority) is basically for better legal efficiency, better allocation of resources,
transparency and accountability.
Many of the original legislation that set up many of the statutory authorities. Some statutory
authories are part of the government setup while some are completely independent of it.Laws
made by Australian statutory authorities are known formally as Regulations. They are cited in a
different fashion from an Act of Parliament -usually with specific initials and a number (both
 Holding and Subsidiary Company
• As to the Companies Act 2006, “Holding company” means a
company-having control over a subsidiary company. “Subsidiary
company” means a company controlled by a holding company.
• An holding company may control its subsidiary company as
follows:
• (a) by holding direct or indirect control over the formation of
the BoDs
• (a) by holding majority shares of the company.
 Registered Company
• A company which is incorporated under
the company Act.
 Limited company
• A limited company is one in which liability of the members is
limited i.e. the members are liable up to the limited amount,
and beyond that they cannot be asked to contribute anything
towards the payments of the company’s liabilities.
• As to the section 7 of the Company Act 2006, the liability of a
shareholder of a company incorporated under this Act in
respect of its transactions shall be limited on to the
maximum value of shares which he has subscribed or
undertaken to subscribe.
 Company Limited by Shares
Companies limited by shares - Because most companies are limited
by shares, this 'stake' usually refers to the shares held by the
company's shareholders. In such a company, the shareholders'
obligation is to pay the company for the shares they have taken in
it. Once the shares are fully paid for (and this would usually be the
case with a private limited company) no further money is payable
by the shareholders. Their liability to the company is satisfied. If
the shares are issued unpaid (which can sometimes be the case for
a variety of reasons), then if the company is wound up it can call on
the shareholders who have not paid for their shares to do so. Either
way, the liability of the shareholder is limited to the amount they
have paid, or they are due to pay, to provide adequate
consideration for the shares that they own.
 Companies Limited by Guarantee
Companies limited by guarantee- In a company limited by guarantee, there
are no shares - hence there are no shareholders. Instead, the company will
have 'members'. The members of a company limited by guarantee are
bound by a guarantee in the company's articles of association, which
requires them to pay the company's debts up to a fixed sum.
It is a surprisingly common misconception that a company which aims to
benefit the community in some way must be limited by guarantee. It is true
that some types of company - for example, those which are to be registered
as charities - have to be limited by guarantee, just as it is true that the
majority of commercial or 'for profit' companies tend to be limited by
shares.
• Companies limited by guarantee are widely used for charities, community
projects, clubs, societies and other similar bodies. Most guarantee
companies are not-for-profit companies .
 Non-proft Company
• A company incorporated for public benefit or other objects relating
to one or more social or cultural activities, or communal or group
interest.
• Provision under the section 166 of the Chapter 19 of the Company
Act 2063 (2006)
• Notwithstanding anything contained elsewhere in this Act, any
company may be incorporated to develop and promote any
profession or occupation or to protect the collective rights and
interests of the persons engaged in any specific profession or
occupation or to carry on any enterprise for the attainment of any
scientific, academic, social, benevolent or public utility or welfare
objective on the condition of not distributing dividends.
 Basic Features of Non-profit Company
1.Its members shall be at least five and after incorporation may be increased more than
five.
2.No distribution of profit though it may earn profit which can be used for fulfillment of
its objective which is mostly of scientific, social, academic, benevolent, welfare and of
public utility.
3.It has no shareholders but members (i.e. promotors)
4.Does not require any form of minimum capital but can receive donation and
membership fee.
5.Members also have limited liability; it may be up to the limit as admitted by them
during incorporation. They cannot write ‘private limited’ or ‘public limited’ or ‘company’
after such entity’s name without permission of the registrar’s Office.
6.It’s a new feature of the Act in the history of Nepalese company law.
7.Unlike the system in other companies, its membership is not transferable.
8.Though there is no room in the Act for the incorporation of company by guarantee,
there is way out to register non-profit company as to the Act.
 Contd…

• Definition of 'Nonprofit Organization' A business entity that is

granted tax-exempt status by the Internal Revenue Service.
Donations to a nonprofit organization are often tax deductible to
the individuals and businesses making the contributions.
• A non-profit company does not have shareholders, it only has
members and does not require any form of minimum capital.
• The income and property of a non-profit company is not
distributable to its incorporators, members, directors, officers or
persons relating to any of them and must be used to advance the
purpose for which it was created, as set out in its MOI. A non-profit
company must have at least three incorporators and three
directors and may be registered with or without members. A non-
profit company is not required to have members.
 Unlimited Company
• An unlimited company is one in which the liability of the
members is unlimited. They are also personally liable for the
payment of the company’s liabilities.
• A company is any entity that engages in business and can be a
proprietorship, partnership or corporation. One of the first and
most important steps in starting a business is deciding how it
will be structured. To make an informed choice, you will need
to know how the different business structures work, as well as
the advantages and drawbacks of each. It is advisable to seek
the advice of an attorney when making your decision.