Type of Company Definition Origin {Features}

Hi, today we discuss the Type of Company for the company is an entity in which people are comming together to invest there money, skills and time for a common purpose and that is to earn a profit

What is the Company

A company is a legal entity made up of people who are working for a common goal or objective

Origin Of Company

The English word Company has its origins in the Old French military term compaignie (first recorded in 1150), meaning a "body of soldiers

Type of Company Definition Origin {Features}

Type of Company Definition Origin {Features}

Type of Company Definition Origin {Features}

Types Of Company

  1. According to incorporation
  2. According to ownership
  3. According to liability
  4. Modaraba company
  5. According to nationality

Let move to the Types Of Company

(1) Types Of Company According to Incorporation

Chartered company

  • These companies are formed by the royal order or charter
  • The word “limited” is not used by the name company
  • The management of a company is run according to the provisions of a charter
  • The members are not liable for the debts of a company

Statutory company

  • These companies are formed by the order of president or by the special act of parliament
  • The main purpose of these companies is the welfare of the public is not so important
  • It is not essential for these companies to use the word “limited”
  • These companies have the monopoly in their respective fields
  • The liability of shareholders is limited to the value of shares purchased

Registered company

  • The registered company is formed under companies ordinance 1984
  • These companies are allowed to do various industrial, agricultural and trading business
  • The rules regarding the company’s formation, management and winding up are stated in the company’s ordinance.

Type of Company Definition

Type of Company Definition Origin {Features}

(2)Types Of Company According to Ownership

Public company

  • In the listed company, a minimum number of members is seven but there is no restriction for maximum
  • The word limited is used after the name of a company
  • The minimum number of directors is seven
  • Shares of the company can easily be sold and transferred
  • The liability of the shareholders is limited to the value of shares purchased
  • It is essential for the company to issue prospectus
  • The audit of a company’s accounts is compulsory every year
  • It is necessary for the company to call the statutory meeting within three to six months of its commencement
  • The minimum number of promoters is seven

Private company

single member company

  • There is only one member or shareholder of this company
  • The company uses the words( S.M.C private LTD) after its name
  • The single person is responsible for the management of the company
  • The shares of the company are non-transferable
  • The liability of the owner of a company is limited
  • A separate legal entity from the single owner
  • Life of a company is long and durable
  • The promoter of SMC is its single owner
  • It cannot be listed on a stock exchange

Multi members company

  • In this company, the minimum number of members is two and the maximum is fifty
  • The company uses the word “private” with its name
  • Minimum number of directors is 2
  • The shares of the company are not transferable
  • The liability of shareholders is limited
  • Not essential for the company
  • The audit is not compulsory
  • No restriction on the call of the statutory meeting
  • Minimum number of promoters is 2

Government company

  • These companies are owned by a federal or provisional government
  • The company all or 51% of shares are held by government
  • The company may be registered as public or private
  • The government is responsible for profit and loss of the company

Holding company

  • A company that holds at least 51% shares of another company
  • The company may have the powers to appoint more than 51% of directors of another company

Subsidiary company

  • It is a company whose more than 50% are held by another company
  • It more than 50% of directors may be selected by the holding company

(3) Types Of Company According to Liability

It includes

Limited by shares

  • It is a company which collects its capital by selling shares
  • The liability of shareholders is limited up to the value of purchased shares
  • It may be private or public
  • It uses the word “limited” at the end of its name

limited by guarantee

  •  Every member give the guarantee to contribute a specified amount of money to the winding up of the company
  • The liability of members is limited up to the guaranteed amount
  • It may be formed with or without share capital
  • The main object of the company is not to earn a profit
  • Use the word “guarantee limited”

Unlimited company

  • The liability of shareholders is unlimited
  • The shares of the company can be transferred

Association not for profit

  • The word limited is not used with its name
  • It enjoys all the privileges of a limited company
  • It required the license from the federal government for its formation as a company
  • It is established to promote commerce, art, science or religious activities

(4) Modaraba company

  • This company is formed under Modaraba companies ordinance
  • In this company, one party contributes capital whereas another party participates in his skill and experience
  • It is transferable
  • It may be specific and multipurpose

(5) Types Of Company According to nationality

It includes

Pakistani company

  • It is the company which is formed and registered in Pakistan
  • It may be public or private
  • The people of Pakistan have the right to receive all the benefits of the company

Foreign company

  • It is a company which is formed and registered outside Pakistan
  • The company’s registered office is outside Pakistan whereas its branches are situated in our country
  • The foreign owners of the company receive all the profits of the company
  • It is essential for the company to submit its accounts and reports to Pakistani register

Type of Company Features

  • Incorporated Association
  • Independent Legal Entity
  • Separate Property
  • Perpetual Existence
  • Common Seal
  • Separation of Ownership and management
  • Transferability of Shares

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