Iv) On the basis of liability: a) Limited (I) by Shares (II) by Guarantee (with or without share capital) b) Unlimited Iii) On the basis of control: a) Holding companies b) Subsidiary companies c) Associate companies Ii) On the basis of number of members: a) One person company b) Private companies c) Public companies I) On the basis of size: a) Small companies b) Other 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. Company Law should therefore recognize a multiple classification of companies. The corporate form can take many shapes in order to respond efficiently to the environment. It should also enable smooth change-over of companies from one type to another.Ģ. To enable a comprehensive framework for different forms of corporate organizations, the Company Law should ensure multiple classifications of companies.
Equally, public companies that access capital from public need to be subjected to a more stringent regime of corporate governance. Private companies and small companies, who do not generally go for public issues or deposits for their financial requirements but utilize their personal or in-house resources, need to be given flexibility and freedom of operation and compliance at a low cost. Rigid structures, unnecessary controls and regulations inhibit the risk taking initiatives of the entrepreneurs. There is a need for the law to take into account the requirements of different kinds of companies that may exist and seek to provide common principles to which all kinds of companies may refer while devising their corporate governance structure. However, with the growth of the economy and increase in the complexity of business operation, the forms of corporate organizations keep on changing. The Companies Act, 1956 broadly classifies the companies into private and public companies and provides for regulatory environment on the basis of such classification.
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View Companies/Directors under Prosecution.Companies (Donation to National) Fund Act, 1951.Limited Liability Partnership Act, 2008.
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