Classifications Of Companies: Jaiib/DBF Paper 3 (Module D),Unit-17

Classifications Of Companies: Jaiib/DBF Paper 3 (Module D),Unit-17

Dear bankers,

As we all know that is Classifications Of Companies for JAIIB Exam. JAIIB exam conducted twice in a year. So, here we are Classifications Of Companies (Unit-17), Commercial Laws with Reference to Banking Operations (Module D), Legal & Regulatory Aspects of Banking -Paper 3.

♦The Basis Mode Of Incorporation

  • Statutory Company: A statutory company is created or incorporated by a special Act passed by either the Central or the State legislature. The Statutory Companies are not required to have Memorandum of Association. Although each statutory company is governed by the provisions of the Special Act, the Companies Act, 1956 is also applicable to them insofar as the provision of the Companies Act.
  • Registered under the Companies Act, 1956 And Also Companies Act, 2013: Such Companies are incorporated and registered under the prevailing companies Act. Registered under the Companies Act  prevailing before the enactment of the Companies Act, 1956, the companies Act, 1913.

Classifications Of Companies On The Basis Of Liability

  • Company limited by shares
  • Company with unlimited liability
  • Company limited by guarantee

♦Classifications Of Companies On The Basis Of Public Interest

  • Private company
  • Public company
  • Government company
  • Foreign company
  • One Person Company
  • Small Company

Private company

  • Section 2(68) of Companies Act, 2013 defines private companies.
  • According to that, private companies are those companies whose articles of association restrict the transferability of shares and prevent the public at large from subscribing to them.
  • The Section further says private companies can have a maximum of 200 members (except for One Person Companies).
  • Moreover, more than two persons who own shares jointly are treated as a single member.
  • This definition had previously prescribed a minimum paid-up share capital of Rs. 1 lakh for private companies, but an amendment in 2005 removed this requirement.
  • Private companies can now have a minimum paid-up capital of any amount.

Public Companies

  • Section 2(72) of Companies Act, 2013 defines Public companies
  • Has a minimum of seven members, no maximum limit is mentioned
  • Has a minimum paid-up capital of five lacs, again there is no maximum limit

Government Company

  • Section 2(45) of Companies Act, 2013 defines government  companies
  • Govt. Company as any company in which not less than 51% of the paid-up share capital.

Foreign Company

  • Section 2(42) of Companies Act, 2013 defines Foreign companies

One Person Company

  • Section 2(62) of Companies Act, 2013 defines One person companies

Small Company

  • Small company is defined under section 2(85) of Companies Act, 2013.
  • As per this section Small Company means a company, other than a public company, Paid up share capital of which does not exceed 50 lakhs rupees or such higher amount as may be prescribed which shall not be more than 5 crore rupees.

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