Joint stock companies are classified based on different perspectives. A brief description of each of them is as follows:
Classification of Joint Stock Companies
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| Classification of Joint Stock Companies |
1. In the case of creation
(A) Chartered Companies: A chartered company with investors or shareholders, the rights granted by the Charter for trade, research and colonial purposes. In the past, businesses often drafted state charters. These companies do not exist in India. Examples of companies like Bank Type England (1694) and East India Company (1600).
(B) Legal Institutions: An institution may be included in the Special Acts of Parliament or in any State Legislature. Such companies are called law firms. Law firms are usually created to create certain public institutions. These are often associated with general uses. Examples: Railways, Water Works, Power Generation, Reserve Bank.
(C) Registered Companies: Companies registered under the Companies Act 2013 are called registered companies. Once the company is registered under the Act, such companies will come into force when the Registrar issues the Certificate of Consolidation. Such companies can be defined by shares or guarantees.
2. The public interest
(A) Private Company: A private company is the most suitable form of family and petty concerns registered under family law. Section 2 (68) of the Companies Act, 2013, defines private companies as, “The articles of those companies regulate the transfer of shares through association articles and prevent the public from subscribing. The characteristics of a private company are as follows:
- The minimum paid-up capital is Rs 1,00,000.
- The minimum number of members is two.
- The maximum number of members is fifty.
- Issuance of shares to the public is prohibited.
- Transfer of shares is prohibited.
Private companies must comply with all of the above conditions. It is mandatory for these companies to write "Pvt Ltd" after their names. Ownership of these companies is restricted to well-selected individuals. It takes at least two people to start a private limited company. Usually, when a partnership needs more money to expand their business, they turn themselves into private companies. In fact they combine the achievements of the company and the partnership form of the business organization. According to the Companies Act 2013, private companies can be classified into the following two categories;
(i) Small Company
Under Section 2 (85) of the Indian Companies Act, 2013, a small company is not a public company. It has the following features.
- The share capital is Rs. Do not exceed. 50 lakhs. Large amount (if any) Rs. Should not be violated. 5 crore.
- Its turnover is Rs. Do not exceed. 2 crore. Large amount (if any) Rs. Should not be violated. 20 crore.
(ii) An individual entity: As per the Companies Act, 2013, "an individual entity (OPC) is a sole proprietorship." The entire share capital of a company is held by only one person, and in order to meet the minimum required members, some bogus members often own 1 or 2 shares of his family members or relatives or friends. Fake partners usually carry primary partner assignments and limited responsibilities.
(B) Public Company: It is an ideal company to conduct large business with large capital. Under the provisions of the Companies Act, 2013, a public company has the following features:
- The minimum capital to be paid is Rs. 5,00,000.
- The minimum number of members is seven.
- The maximum number of members is unlimited.
- The public company must use the word "limited" as part of its name. A public company must be defined after a public limited company or its name. Examples: Steel Authority of India Limited, Reliance Industries Limited.
3. In terms of entitlement:
(A) Government Institution: A public company in which more than 51% of the share capital is held by the Central Government or any State Government or by two Governments, either by the Central Government or by the State Governments. Example: State Chamber of Commerce, Minerals and Metals Trading Corporation India Limited, BHEL, ONGC etc.
(b) NGO: All companies except NGOs are called NGOs. They do not satisfy the characteristics of government agencies.
4. In case of liability:
(A) Companies limited by shares: A company is called a company that is limited by the number of shares defined by the value of the shares defined by the liabilities of its members.
(B) Guaranteed Companies: When members contribute to the assets of a company, respectively, a company can contribute to the liability of its members to the extent specified in its reference. Each member cannot claim the guarantee amount until it affects the company. Guaranteed limited companies are very small in number because they are non-commercial companies.
(C) Unlimited Companies: Members of these companies may be invited to make payments out of their personal assets to meet the Company's liabilities at the time of termination. The capital of these companies can be easily transferred by implementing a special resolution without the permission of the court. However, such companies are rarely created, and they are found today.
5. In terms of control:
(A) Holding Company: When a company controls the management of another company, the controlling company is called a 'holding company'.
(B) Subsidiary: A subsidiary in which one company controls the management of another company. For example, if Company A holds more than 51% of B's B-off capital, Company B is called a subsidiary.
6. On a national basis:
(A) Indian Company: A company registered in India as a place of business in India is called an Indian company. It can be a private company or a public company.
(B) Foreign Company: This is a company affiliated outside India and has a business location in India. The term business space does not mean agency business in India. When all the shareholders of a company are Indian citizens, a company is called a foreign company if it is registered outside India.
7. Based on area:
(A) National Institution: Such Institutions are regulated within the borders of the country in which the National Institutions are registered. Buyer and seller are from the same country, and the currency remains the same.
(B) Multinationals: Such organizations are several national or international organizations that extend a portion of their activities beyond the country in which they are registered. Buyer and seller are from two different countries and hold foreign exchange.
8. When starting a business:
(A) Inactive Company: This is a company which has not done any account transaction for two years. The Registrar of Companies may declare or call such a company a "dormant company". The initiative or formation of non-performing companies was undertaken by the Ministry of Corporate Affairs.
(B) Defective company: A company with no assets or liabilities, a company that fails to start a business within one year of consolidation, such company is inactive. Whether the status of a company was traded publicly or privately, it went bankrupt and ran out of stock.
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