Indian company law regulates the corporations formed under the Section 2(20) Indian Companies Act 2013. “Company means a company incorporated under this Act or under any previous Company Law”

Types of companies :

  • Sole Proprietorship – A sole proprietorship, also known as a trader firm or proprietorship, is a business form that is owned and run by one individual. A sole proprietor may use a trade name or business name other than his or her name.
  • Registration not required – In summary, biggest advantage is quick formation and low compliances. However, the biggest disadvantage is unlimited liability.
  • Partnership – liability is joint and unlimited.
    • Registration not compulsory.
    • Active partners take part in day-to-day operations of the business, in addition to investing in it. Active partners are entitled to a share of the enterprise’s profits.
    • Sleeping partners invest in the business and are entitled to a share of its profits, but do not participate in day-to-day operations.
  • Limited Liability Partnership – Liability is limited
  • HUF (Hindu Undivided Family) – businesses owned by a joint family belonging to Hindu religion. Even though Jain and Sikh families are not governed by the Hindu law, they can still form a HUF.
  • Cooperative
  • Dormant company – A company which has been created for a future project or for holding assets including intellectual property of the company
  • Family Owned Business
  • Pvt Ltd (Private Limited Company): ≈ Ltd (UK) – May have 2–200 shareholders; shares are held privately and cannot be offered to public.
  • Small company – A company other than a public company whose paid up share capital is not more than ₹ 50 lakh and turnover does not exceed ₹ crore.
  • Ltd (Public Limited Company): ≈ plc (UK)
  • Public sector undertaking (PSU) – Alternatively known as Public Sector Enterprise (PSE). It may be public limited company listed on stock exchanges with major ownership by a state government or a central government of India or it may be unlisted entity with major ownership by a state government or a central government of India. Some of these entities are formed as business entities through special legislation, where these entities are governed by the statutes of these legislation and may or may not be governed by company laws like a typical business entity.
  • One-person company – It is a type of private company which can have only one director and member.
  • Unlimited Company – A company, similar to its limited company (Ltd, or Pvt Ltd) counterpart, but where the liability of the members or shareholders is not limited.
  • Incorporated Company and for more information about Company incorporation click here
Indian Company Law” by Wikipedia is licensed under CC BY 2.0

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