COMPANIES
SECTION 2(20)
As per Section 2(20) of Companies Act, 2013 A company means a company incorporated under this act and any previous Company law.
Features of company
T – Transferability of shares
O – Ownership is different from management
P – Perpetual succession
C – Common seal
L – Limited liability of members
A – Artificial legal person
S – Share capital
S – Separate legal entity
CLASSIFICATION OF COMPANIES
ON THE BASIS OF OWNERSHIP
- PRIVATE COMPANY: Section 2(68): Private company refers to that company whose minimum paid up share capital as may be prescribed and by which its articles
L: limits the number of members to 200
R: restricts the transfer of its shares
P: prohibits the invitation to the general public
- PUBLIC COMPANY: Section 2(71): Public company refers to that company which is not a private company.
ON THE BASIS OF LIABILITY
- COMPNY LIMITED BY GUARANTEE: Section 2(21): it refers to that company the liability of whose members is limited to the extent of certain amount prescribed in the Memorandum of Association of company.
- This amount can only be called up in the event of wounding up of company.
- COMPNY LIMITED BY SHARES: Section 2(22): It refers to that company the liability of whose members is limited to the extent of unpaid share capital.
- This amount can be called any time either during the lifetime or during the event of winding up of company.
- UNLIMITED COMPANY: Section 2(92): It refers to that company in which there is no limit on the liability of its members.
ON THE BASIS OF CONTROL
- HOLDING COMPANY: Section 2(46): It refers to that company in relation to other companies in which such companies are subsidiary companies.
- SUBSIDIARY COMPANY: Section 2(87): It refers to that company in relation to other companies in which holding companies
- Controls the composition of board of directors
- Controls more than 50% of its voting power
- ASSOCIATE COMPANY: Section 2(6): It refers to that company in relation to other companies in which such company have a significant influence on it but such company is not a holding company.
- The word significant influence means that such company controls at least 20% of its voting power.
OTHERS
- ONE PERSON COMPANY: Section 2(62): It refers to that company which has only one person as a member.
Requirements to fulfilled to be a sole member or a nominee in an OPC
- Natural person
- Indian citizen
- Resident of India or otherwise have stayed in India for not less than 120 days in the preceding financial year.
- Major
- An OPC must have to assign a nominee at the time of incorporation.
- An OPC cannot be converted into Section 8 (NPO) company.
- An OPC cannot be converted into Non-banking financial institutions (NBFC).
- An OPC cannot invest its money in any other companies.
| Withdrawal of consent by nominee himself | Removal of nominee by sole member |
| Notice by nominee toSole memberOPC | Notice by sole member tonomineeOPC |
| Within 15 days of notice of Withdrawal of consent by nominee a New Nominee must be appointed and his consent must be taken in Form no. INC 3 | 2. Sole member will appoint a new nominee and his written consent must be taken in the Form no. INC 3 |
| Filing with ROC Notice of withdrawal of consent of nomineeNotice of consent of new nominee in the Form No. 4 within the 30 days from the withdrawal of consent | 3.Filing with roc within 30 days from the date of intimation of change to company (Form No. 4) |
- SMALL COMPANY: Section 2(85): It refers to that company which is not a public company and whose
- Paid up share capital should not exceed 50 lakhs and as may be prescribed (2 crore) which should not be more than 10 crores.
- Its turnover should not exceed 2 crores and as may be prescribed (20 crores) which should not be more than 100 crores.
Distinction between Private Company, Public Company and OPC
| Particulars | Public Company | Private Company | OPC |
| Section | Section 2(71) | Section 2(68) | Section 2(62) |
| Minimum no. of members | 7 | 2 | 1 |
| Maximum no. of members | No limit | 200 | 1 |
| Minimum no. of Directors | 3 | 2 | 1 |
| Maximum no. of Directors | 15 | 15 | 15 |
| No. of nominee min/max | – | – | 1 |
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