We find a variety of companies in our county. The formations, liability, management and
ownership of all companies differ from each other. Let us classify the different types of
companies on the basis of their ownership and nationality. Accordingly, we have three type
of companies - Private Limited, Public Limited and Government companies on the basis of
ownership and two types of companies - Indian and Foreign, on the basis of nationality.
On the basis of Ownership On the basis of Nationality
i. Private Limited
ii. Public Limited
iii. Government.
Private Limited Company
These companies can be formed by at least two individuals having minimum paid–up capital
of not less than Rupees one lakh. As per the Companies Act, 1956 the total membership of
these companies cannot exceed 50. The shares allotted to its members are also not freely
transferable between them. These companies are not allowed to raise money from the public
through open invitation. They are required to use “Private Limited” after their names. The
examples of such companies are Combined Marketing Services Private Limited, Indian
Publishers and Distributors Private Limited, Oricom Systems Private Limited, etc.
Public Limited Company
A minimum of seven members are required to form a public limited company. It must have
minimum paid–up capital of Rs 5 lakhs. There is no restriction on maximum number of
members. The shares allotted to the members are freely transferable. These companies can
raise funds from general public through open invitations by selling its shares or accepting
fixed deposits. These companies are required to write either ‘public limited’ or ‘limited’
after their names. Examples of such companies are Hyundai Motors India Limited, Steel
Authority of India Limited, Jhandu Pharmaceuticals Limited etc.
Government Company
In these companies the Government (either state or central government or both) holds a
majority share capital i.e., not less than 51%. However, companies having less than 51%
share holding by the government can also be called Government companies provided control
and management lies with the government. Examples of government companies are:
Mahanagar Telephone Nigam Limited, Bharat Heavy Electricals Limited.
ownership of all companies differ from each other. Let us classify the different types of
companies on the basis of their ownership and nationality. Accordingly, we have three type
of companies - Private Limited, Public Limited and Government companies on the basis of
ownership and two types of companies - Indian and Foreign, on the basis of nationality.
On the basis of Ownership On the basis of Nationality
i. Private Limited
ii. Public Limited
iii. Government.
Private Limited Company
These companies can be formed by at least two individuals having minimum paid–up capital
of not less than Rupees one lakh. As per the Companies Act, 1956 the total membership of
these companies cannot exceed 50. The shares allotted to its members are also not freely
transferable between them. These companies are not allowed to raise money from the public
through open invitation. They are required to use “Private Limited” after their names. The
examples of such companies are Combined Marketing Services Private Limited, Indian
Publishers and Distributors Private Limited, Oricom Systems Private Limited, etc.
Public Limited Company
A minimum of seven members are required to form a public limited company. It must have
minimum paid–up capital of Rs 5 lakhs. There is no restriction on maximum number of
members. The shares allotted to the members are freely transferable. These companies can
raise funds from general public through open invitations by selling its shares or accepting
fixed deposits. These companies are required to write either ‘public limited’ or ‘limited’
after their names. Examples of such companies are Hyundai Motors India Limited, Steel
Authority of India Limited, Jhandu Pharmaceuticals Limited etc.
Government Company
In these companies the Government (either state or central government or both) holds a
majority share capital i.e., not less than 51%. However, companies having less than 51%
share holding by the government can also be called Government companies provided control
and management lies with the government. Examples of government companies are:
Mahanagar Telephone Nigam Limited, Bharat Heavy Electricals Limited.
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