Types of Companies&Types of Capital

Meaning of Company

A company is an association of many persons who contribute money or money’s worth to common stock and employs it for a common purpose. The common stock so contributed is denoted in money and is the capital of the company.
Characteristics of a Company

1. Voluntary association
2. Separate legal entity
3. Free transfer of shares
4. Limited liability
5. Common seal
6. Perpetual existence.

Formation of Company:

1. Promotion
2. Incorporation
3. Commencement of business

Types of Companies                                    
                                       Statutory companies
                                       Government companies
                                       Foreign companies
Registered companies:

• Companies limited by shares
• Companies limited by guarantee
• Unlimited companies
• Private company
• Publiccompany                                                                                                                           Private Company: A private co. is which by its AOA:
Restricts the right of the members to transfer of shares
Limits the no. of members to 50
Prohibits any invitation to the public to subscribe for its shares or debentures.
Public Company: A company, the articles of association of which does not contain the requisite restrictions to make it a private limited company.
• Deemed Public Ltd. Company:
   A private company is a subsidiary company to public company it satisfies the following terms/ conditions Sec.3 (1)3
             Having minimum share capital 5 lacks
*Accepting investments from the publics
*No restriction of the transferable of shares
*No restriction of no. of members
*Accepting deposits from the investors

Types of Capital

Equity Share Capital: The total sum of equity shares is called equity share capital.
Authorized Capital:  It is the maximum amount of the share capital which a company can raise for the time being.
Issued Capital: It is that part of the authorized capital which has been allotted to the public for subscriptions.
subscribed Capital: It is the part of the issued capital which has been allotted to the public
Called Up Capital: It has been portion of the subscribed capital which has been called up by the company.
Paid Up Capital: It is the portion of the called up capital against which payment has been received.