[Commerce Class Notes] on Types of Companies Pdf for Exam

Many people perceive the public Company as the Company having a public share. However, the public Company is essentially a corporation where the ownership is distributed to various people by the general public shareholders through free trade of the shares in the nation’s stock exchange. Daily trading in the market is one of the best ways of determining the true values of the Company. A Company can be termed as public when shareholders can purchase the Company’s stock. 

The Different Types of Companies in India

India is one of the fastest-growing economies in the world and the service industry needs appreciation for its contribution to the economy of the country. Many foreign investors have now turned their attention to Indian, considering its immense potential, for future investments. Some of the different types of Companies in India are as follows: Public Company, Private Company, Joint-venture Company, Partnership firm, person Company, Sole proprietorship, Branch office, and Non-government organisations. 

Private Company and Public Company

The Private Company differs from the Public Company in several different ways. The public Company is publicly traded in the open share market of the nation. Comparing a public Company to a Private Company, public Companies tend to have a specific advantage. Some of the public Companies in India are the State Bank of India, Indian OIl Corporation, and Hindustan Petroleum Ltd.

According to the definition of the public Company, the Company having a minimum paid-up share capital of a minimum of Rs. 5 lakh or more is described as a public Company. The member’s list of the public limited Company has no end. There is no limit on the maximum capacity; however the minimum number of the owners should be at least seven, and the minimum number of directors should be three simultaneously.

In contrast to the public Companies, the Private Company needs to have a minimum of two founding members and also the Company must have two directors. The founding members of the Company are also eligible for becoming directors as well. The minimum capital should be 1 lakh. 

For the Private limited Company, each of the shareholders’ liability or Company members are limited. Due to this, if the Company experiences a loss, Company members and the shareholders are completely reliable and they have the option of selling the Company’s share for clearing out the debt. The asset of the shareholders is not at risk, so you don’t have to worry about selling your land or apartment when the Company is in a dire state.