Types of Company

When did Companies Act, 2013 came into force?

Companies act was brought into force stage wise. Section 1 of this act came into force on 30 August, 2013. 98 different sections came into force on 12 September 2013, with a few changes. A total of another 183 sections came into force from 1 April, 2014.

What are the factor on which classification of a company depends?

The classification of the company depends on the following factors, such as:

• Size of the company
• Ownership structure
• Intended business activity
• Country of origin
• Liability of owners

What is a Section 8 company?

Section 8 Company, also known as companies formed with charitable objects. According to section 8 of the Companies Act, 2013, these companies are formed to promote the charitable objects of commerce, art, science, sports, education, research, social welfare, religion, charity, environment conservation etc.

What is a Medium Company?

A Medium Company is a company whose investment in plant and machinery does not exceed ₹50 crore, and the annual turnover of such company does not exceed ₹250 crore.

Who regulates Listed companies?

Listed companies are strictly regulated by the Securities Exchange Board of India (SEBI). Listed company is required to follow regulatory and statutory requirements as notified by SEBI.

Company is one of the most popular types of business arrangement in India which is widely opted by entrepreneurs and non-individual entities to run business and achieve their objectives. In India, Companies Act, 2013 governs the regulation of companies and all types of compliances. The act is framed to provide a legal framework for the formation of companies covering the ambit of incorporation, compliances, accountability, management, etc. Earlier before the Companies Act 2013, the Companies Act, 1956 was in operation. The main aim behind passing this legislation is to ensure transparency and make sure fair trade practices are incorporated uniformly.

The provisions of Section 2(20) of the Companies Act, 2013 define a company as a “Company incorporated under this act or any previous company law.” A company is an artificial person, which is created by law that has a separate legal entity, perpetual succession, common seal, and limited liability. There can be several factors that can affect the classification of the company such as size of the company, ownership structure, intended business activity, country of origin, and liability of owners.

Key Takeaways

• A company is a legal entity that is formed by a group of individuals to engage in and operate a business organization in a commercial or industrial capacity.
• The business line of a company depends on its structure which can range from a partnership to a proprietorship, or even a corporation.
• A company is purposely organized to earn profits from running its business.