Type of Company
We can classify the company on several bases but the following are the main types of companies
- Limited Liability Companies
- Unlimited Liability Companies
- Private Companies
- Public Companies
- Incorporated Companies
- Unincorporated Companies
|Basis of Difference
|Number of Members
|Minimum of 2 and according to the new Companies Act 2013 maximum Of 200 members.
|Minimum of 7 and there is no limit for maximum members.
|Articles of Association
|It is mandatory to make an Articles of association.
|Preparation of articles of association is not compulsory for a company. According to the Companies Act 2013, if articles are not prepared, the rules of Table F to Table J will be applicable.
|Commencement of Business
|It can start its business soon after incorporation.
|It cannot start its business until it gets a certificate from the government to start the same.
|Issue of Shares
|A private company cannot make an offer to the public for buying its shares and debentures.
|It is mandatory in the case of a public company to issue its shares and debentures to the public.
|Allotment of Shares
|It can allot shares soon after its incorporation.
|It cannot allot shares until it receives a minimum subscription.
|It is not necessary for a private company to call a statutory meeting and file a statutory report.
|It is mandatory in case of a public company to call a statutory meeting and file a statutory report according to the law.
|Transfer of Shares
|There is always a restriction on the transfer of shares as per the Articles of Association.
|Shares can be freely transferred from one person to another.
|Appointment of Managing Directors
|There is no restriction in the appointment and the remunerations allowed to managing directors.
|There are many restrictions in the appointment of Directors and the remunerations allowed to managing directors under the Indian Company’s Act 2013.
|Issue of Prospectus
|It cannot issue a prospectus neither it files a substitute of prospectus.
|It is mandatory to issue a prospectus. In the absence of a prospectus, it will publish a substitute prospectus.
|Loan to Directors
|It is not necessary to take any permission from the government of India to issue a loan to the directors of a company.
|It is a must to take permission from the government of India before allowing any loan to the directors of a company
|Report to Registrar
|Report of the list of directors and their consensus is not mandatory to be sent to the registrar.
|It is mandatory to send a report of the list of directors and their consensus to the registrar.
|Number of Directors
|It has at least two directors who are not liable for their retirement by rotation.
|It has a minimum of three directors and they get retired one by one.
|It is a must for a Private Company to add the word ‘Private’ with its name.
|It is not mandatory to add the word ‘Public’ with the name of a Public Limited Company.