A Detailed Guide to Different Types of Companies

Posted on the 07 November 2019 by Mergertechcapital

There is no doubt that having an ideal business approach can easily influence all the stakeholders to be on board, but there comes a time in every organization where there is a need to expand the horizons by convincing the young and creative minds to join the army with the indexing entrepreneurs. This article brings to you the perfect guide of organizations which will make indexing your company easier. Let us start by distinguishing between the different types of companies a start-up can be transformed into.

Different Kinds of Company

The various types of company can be distinguished into numerous classes on the basis of aspects like the incorporation mode, the dependability of the associates, the members and the executives in association with the complete employee count. We will be dividing some of the common types of company into three major categories, which are as follows:

  • Companies Founded on The Basis of Incorporation Mode
  • Royal Accounted Organization

The royal accounted organizations are those organizations that are formed by the royal lease. This suggests that this type of company is offered power directly by the ruler, the king or the queen. One of the few great examples of such organizations is East India Company and Bank of England.

  • Statutory Organization

The statutory organizations are those corporations which are formed to enact as a medium of a specific rule stated by the central or state judiciary. These organizations are mainly strengthened and backed by mandatory rights that help the state or center in maintaining certain specific trade regulations, such as the LIC rule of 1956 gave birth to LIC Insurance Corporation of India and the RBI law of 1934 to the Reserve Bank of India.

  • Incorporated or Registered Organizations

This category includes organizations which are formed by the organization act, which are regulated by the governing bodies. Companies like Google India Private Limited fall under this criteria only if they are enrolled or indexed by the certificate of implementation that is accepted by the Companies Registrar.

  • Companies Founded on The Basis of Member Count
  • Public Limited Organizations (Public Organizations)

The Public Limited Organization is completely distinct from the shareholders and has a limited dependability of the members also. A minimum of seven members is necessary to create a Public limited organization, although there is no specified capping on it. The type of companies such as these, generate funds by selling their shares to investors, however the investors are not involved in the daily management; thereby keeping the ownership and management different.

  • Private Limited Organizations (Private Organizations)

The private limited organization has a specified range of member count, ranging from two to fifty members but the liability these members are subjected to is uncapped depending on the category of the organization.

  • Individually Owned Organizations

This type of company category came into existence with the Companies Act 2013. These individually owned organizations may have capped dependability, thereby reducing the risk of personal assets.

  • Companies Founded on The Basis of Dependability of its Members
  • Organizations Bounded by Shares

A major portion of the private limited firms belong to this category, in which the dependability of the investors is reduced to the actual value o shares they possess.

  • Organizations Bounded by Assurances

The investors of this type of companies assure the reimbursement of a specific and predetermined amount in case it is dissolved to cater the pending liability of the organization.

  • Infinite Organizations

This type of organization is a rare category as there is no limit on the dependability of the investors if the company dissolves. The investor in such an organization may even need to pay a higher amount of the assets they own in order to cater the existing amount of the organization.

After this guided article on types of companies, it is clear that one needs to assess all the positives and negatives before getting their own start-up register. It is essential to ensure the company is incorporated legally and follows all necessary guidelines. Through this article, we hope to have made your concepts and understanding about the various kinds of company clearer.

I hope this article on types of company was helpful to you and if you have any questions related to types of company then you can mention them in comments.

Back to Featured Articles on Logo Paperblog