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Types of companies

  1. Private Limited – S. 3(1)(iii)

  1. A private company means a company, which has a minimum paid-up capital of rupees one lakh and by its articles.

  1. restricts the right to transfer its shares, if any;

  2. limits the number of its members to fifty not including —

  1. persons who are in the employment of the company; and

  2. persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased; and

  1. prohibits any invitation to the public to subscribe for any shares in, or debentures of, the company;

  2. prohibits any invitation to or acceptance of deposits from person other than its members, directors or their relatives.

ii) An existing private company with a paid-up capital of less than Rs. one lakh shall within a period of two years from commencement of the Amendment Act, 2000 (13-12-2000) enhance their paid-up capital to Rs. one lakh.

  1. Public company 3(1)(iv)

  1. A public company is a company which

  1. is not a private company

  2. has a minimum paid-up capital of Rs. five lakhs.

    An existing public company with a paid-up capital of less than Rs. five lakhs shall within a period of 2 years from the commencement of the Companies (Amendment) Act, 2000 enhance its paid-up capital to Rs. five lakhs.

  3. is a private company which is a subsidiary of a public company.

  1. A public company shall have

— minimum 7 subscribers

— minimum number of 3 directors.

  1. A private company, being a subsidiary of a body corporate incorporated outside India would be deemed to be a public company, if the entire share capital of such private company is not held by one or more bodies incorporated outside India. [Sec. 4(7)]

  1. The Companies (Amendment) Act, 2000 has abolished the concept of Deemed Public Company with effect from 13-12-2000. Where a deemed public company becomes a private company on or after the commencement of the Companies (Amendment) Act, 2000, such company shall inform the Registrar that it has become a private company.

  2. A company, which has not complied with the requirement of minimum capital, specified in paras 1(ii) and 2(i)(b) above will be deemed to be a defunct company under section 560 of the Companies Act, 1956 and its name shall be struck off from the Register by the Registrar pursuant to Circular No. 13/203 dated 25-3-2003.

  3. The companies following keywords in their names approval require to have minimum authorised capital mentioned as under:

 

Keywords

Required minimum
authorised capital (Rs.)

1.

Corporation

5 crores

2.

International, Globe, Universal, Continental, Intercontinental, Asiatic, Asia, being the first word of the name

1 crore

3.

If any of the words at (2) above is used
within the name (with or without brackets)

50 lakhs

4.

Hindustan, India, Bharat, being the first
word of the name

50 lakhs

5.

If any of the words at (4) above is used
within the name (with or without brackets)

5 lakhs

6.

Industries/Udyog

1 crore

7.

Enterprises, Products, Business,
Manufacturing

10 lakhs

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