Different kinds of Companies

Company is an association of persons coming together with a common motive of doing business which is legal in nature to earn profits out of the same and share it among themselves as agreed. There are different kinds of companies that can be established to do business and earn profits. Kinds of companies we generally see are as follows;


  1. Public Company
  2. Private Company
  3. Holding Company
  4. Subsidiary Company
  5. Government Company
  6. Foreign Company
  7. Statutory Company


Public Company

The Company which has a paid-up of Rs 5 lakhs and more is called as a public company. A public company requires a minimum of 7 members to form the company and there is no restriction of maximum number. It must have atleast 3 directors. The directors of the public company must file with the registrar of companies to act as a director to a public company. The public company can issue its shares for subscription to general public. The share and the debentures sold can be easily transferable.

Private company

The Company which has a paid-up capital of Rs 1lakh and more can be a private company. To form a private company minimum 2 members are required and the upper limit is 50. For a private company minimum 2 directors are needed and they do not need any filing with registrar of companies. The shares cannot be transferred as that is restricted by the articles.

Holding Company

When a company is having a holding on another company then that company is called as a holding company. The holding companies generally have maximum share in a company it is having hold over it.

Subsidiary Company

A company is a subsidiary when it controlled by another company. Its organization and working is mostly controlled by another company. The share of a subsidiary company will be mostly under the control of another company.

Government Company

The Company having a paid-up capital in which the Government’s share is more than 51 percent is a government company. The government company is controlled mostly by the government. For instance, the auditor of a government company is appointed by the government after consultation and advice from the Comptroller and Auditor General of India. The annual reports of these companies are placed before the parliament of India.

Foreign Company

When a company established outside India and its paid-up capital share of 50 percent and above is held with an Indian, it is called as a foreign company.

Statutory Company

A company that is established by a special act or statute of the legislature is a statutory company. These companies are generally created for public services and utilities.

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