1. The Companies Act, 2013 broadly classifies the companies into private and public companies and provides for regulatory environment on the basis of such classification. However, with the growth of the economy and increase in the complexity of business operation, the forms of corporate organizations keep on changing. To enable a comprehensive framework for different forms of corporate organizations, the Company Law should ensure multiple classifications of companies. It should also enable smooth change-over of companies from one type to another.
Classification of Companies
2. The corporate form can take many shapes in order to respond efficiently to the environment. Company Law should therefore recognize a multiple classification of companies. The Committee indicates the criteria for classification on the basis of the forms discernible today, but recognizes that such classification can never be exhaustive.
i) On the basis of size:
a) Small companies
b) Other companies
ii) On the basis of number of members:
a) One person company
b) Private companies
c) Public companies
iii) On the basis of control:
a) Holding companies
b) Subsidiary companies
c) Associate companies
iv) On the basis of liability:
a) Limited
(I) by Shares
(II) by Guarantee (with or without share capital)
b) Unlimited
v) On the basis of manner of access to capital:
a) Listed companies
b) Un-listed companies
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