As per activities undertaken by companies

• Manufacturing companies

Companies mainly engaged in any type of manufacturing activities are primarily classified as manufacturing companies. These companies are required to comply with the provisions of Companies Act, 2013 along with the rules as may be prescribed there under.

Major Applicable Law  Central excise Act, 1944 and rules made there under

• Service companies

Companies mainly engaged in any type of service activities like consultancy, management, information technology, etc. are termed as service companies.

These companies have to comply with the provisions of Companies Act, 2013 along with the rules as may be prescribed made there under.

Major Applicable Law  Finance Act, 1994 (Service Tax)

• Non-Banking Financial Companies (NBFC)

Section 45-I of the Reserve Bank of India Act, 1934 defines ‘‘non-banking financial company’’ as—

(i) a financial institution which is a company;

(ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner;

(iii) such other non-banking institution or class of such institutions, as the Bank may, with the previous approval of the Central Government and by notification in the Official Gazette, specify.

Company to be considered as a NBFC, are:—

ü  deployment of funds

ü  recognition of income.

NBFC Companies viz. Compulsory registration with the RBI for commencement NBFC activities

 Different types of NBFCs in India:

þ  Asset Finance Company (AFC)

þ  Investment Company (IC)

þ  Loan Company (LC)

þ  Infrastructure Finance Company (IFC)

þ  Infrastructure Debt Fund: Non- Banking Financial Company (IDF-NBFC)

þ  Non-Banking Financial Company – Factors (NBFC-Factors)

þ  Gold Loan NBFCs in India

þ  Residuary Non-Banking Companies (RNBCs)

• Housing Finance Company

Company is having business activities of housing finance, it has to comply with the provisions of National Housing Bank Act, 1987 and directions issued by the National Housing Bank and must be registered with NHB.

• Non-profit making/Charitable companies(Section 8)

Any association desirous of being incorporated as a company with limited liability, without the addition of word "Limited" or the words "Private Limited" as the case may be shall make an application electronically to the Central Government on behalf of such company/proposed company as the case may be, for grant of licence under section 8 of the Companies Act, 2013.

Central Government is satisfied that:—

(a) the object for which the company is proposed to be formed or already formed is to promote

commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;

(b) profits, if any, earned in carrying out the object and other income are proposed to be applied only for promoting its objects; and

(c) the company intends to prohibit the payment of dividend to its members.

As per Companies Act, 2013

There are three methods Section 3(1) in which a Private Limited Company could be formed

a. A Company limited by shares; or

b. A Company limited by guarantee; or

c. An Unlimited company

• Companies limited by shares

Section 2(22) of the Companies Act, 2013 provides that a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them is a company limited by shares.

The liability of each member of such company is limited to the unpaid amount of shares and premium, if any, held by him.

• Companies limited by guarantee

Section 2(21) of the Companies Act, 2013 provides that a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up is termed as a company limited by guarantee.

Such a company by way of undertaking in its Memorandum of Association restricts the liabilities of its members to a certain fixed amount, for payment of the debts and liabilities of the company in the event of winding up. The members are liable only for the amount contracted before he ceased to be a member or payment of the debts and liabilities within one year after he ceased to be a member.

• Unlimited companies

Section 2(92) of the Companies Act, 2013 provides that a company not having any limit on the liability of its members is termed as unlimited company. Such types of companies are analogous to that of partnership firm in respect of the liability of a member.

Every member in such a company is jointly and severally liable for all the debts and liabilities of the company.

• Public limited companies

The Company defined under section 2(71) of the Companies Act, 2013 is a public company which—

(a) is not a private company;

(b) has a minimum paid-up share capital as may be prescribed:

Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles.

• Unlisted Companies

These types of companies do not invite general public to subscribe for its shares and securities and generally the directors, friends, their relatives and associates hold all the shares and securities in such companies. Unlisted companies are not required to comply with any requirements of the stock exchange and SEBI.

• Listed Companies

Section 2(52) of the Companies Act, 2013 provides that a company which has any of its securities listed on any recognised stock exchange is a listed company. These types of companies are having listing of its securities with one or more recognised stock exchanges in the country and are required to comply with the requirements of the Listing Agreement, Depository Rules and SEBI regulations as may be notified from time to time.

• Private limited companies

Section 2(68) of the Companies Act, 2013 defines private limited company as a company having a minimum paid-up share capital as may be prescribed, and which by its articles,—

(i) restricts the right to transfer its shares;

(ii) except in case of One Person Company, limits the number of its members to two hundred:

Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:

Provided further that—

(A) persons who are in the employment of the company; and

(B) 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, shall not be included in the number of members; and

(iii) prohibits any invitation to the public to subscribe for any securities of the company.

• Holding and Subsidiary companies

Section 2(46) provides that “holding company”, in relation to one or more other companies, means a company of which such companies are subsidiary companies.

Section 2(87) provides that “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company—

(i) controls the composition of the Board of Directors; or

(ii) exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies:

Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed.

Explanation.—For the purposes of this clause,—

(a) a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub-clause (i) or sub-clause (ii) is of another subsidiary company of the holding company;

(b) the composition of a company’s Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors;

(c) the expression “company” includes any body corporate;

(d) “layer” in relation to a holding company means its subsidiary or subsidiaries;

• Government companies

Section 2(45) of the Companies Act, 2013 provides that “Government company” means any company in which not less than 51% of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company;

• One Person Company

One person company is new concept in India under the Companies Act, 2013. Section 2(62) of the Companies Act, 2013 defines that “One Person Company” means a company which has only one person as a member.

One person company is required to identify in its name in bracket as “One Person Company” after its name.

Section 3(1)(c) of the Companies Act, 2013 provides that where the company to be formed is to be One Person Company that is to say, a private company, the company may be formed by one person subscribing his name to a memorandum and complying with the requirements of this Act in respect of registration.