WHAT IS COMPANY?


Company means a voluntary association formed and organized to carry on a business.

In India Company means a company incorporated under Companies Act, 2013 or Companies Act, 1956 or under any previous company law.

Type of companies include as follows

  • 1. One Person Company - OPC
  • 2. Small company - Pvt Ltd
  • 3. Private company - Pvt Ltd
  • 4. Public Company - Limited
  • 5. Dormant Company
  • 6. Sec.8 Company
  • 7. Nidhi Company

One Person Company (OPC) is a revolutionary and new age business concept for young entrepreneurs. OPC concept has been introduced in the new Companies Act 2013, aims to provide simpler legal administration and to structured corporatization of micro and small businesses.

The concept of "Small company" has been introduced in Companies Act, 2013. Small companies defined based on their capital and turnover position for the purpose of proving certain relief/ exemptions to these companies.

Small Company means a company, other than a public company

  • 1) Paid-up share capital of which does not exceed fifty lakh rupees (? 50,00,000) or such higher amount as may be prescribed which shall not be more than five crores rupees (? 5,00,00,000).
  • 2) Turnover of which as per its last profit-and-loss account does not exceed two crore rupees (? 2,00,00,000) or such higher amount as may be prescribed which shall not be more than 20 9crore INR
  • 3) As set out in the 2013 Act, this section will not be applicable to the following.
    • a. A holding company or a subsidiary company
    • b. A company registered under section 8
    • c. A company or body corporate governed by any special Act [section 2(85) of 2013 Act].

The company is Private Company within the meaning of section 2 (68) of the companies Act, 2013 and accordingly:

  • 1) No invitation shall be issued to the public to subscribe for any securities of the company.
  • 2) The number of member of the company (exclusive of persons who are in the employment of the Company and 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 be limited to two hundred, provided that for the purpose of this definition where two or more persons jointly hold one or more shares in the Company, they shall be treated as a single member: and
  • 3) The right to transfer the shares of the Company is restricted in the manner and to the extent hereinafter appearing.

Public Company means a company which:

  • a) Not a private company.
  • b) Has a minimum paid-up share capital of Five Lakh rupees or such higher paid-up capital, as may be prescribed:
    Provided that a company which is a subsidiary of a company, not being a private

Dormant Company: The companies Act, 2013 states that a company can be classified as dormant when it is formed and registered under this 2013 Act for a future project or to hold an asset or intellectual property and has no significant accounting transaction. Such a company or an inactive one may apply to the ROC in such manner as may be prescribed for obtaining the status of a dormant company. [Section 455 of 2013 Act]

Section 8 Company: According to Section 8(1)(a), (b) and (c) of the Companies Act,2013, A Section 8 company shall register itself under charitable objects, the Central Government shall issue a License in prescribed manner allow that person or association of person to register as Private Limited or Public Limited Company. Section 8 company which is registered as a non-profit organisation.

Nidhi Company: One type of non-banking finance company and is recognized under Section 406 of companies Act 2013 and Companies (Nidhi companies) Rules, 2014 governs and the law and procedure for Nidhi company.

“Nidhi” means a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with such rules as are prescribed by the Central Government for regulation of such class of companies

Chit Company: As per Chit Fund Act 1982, “chit” means a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead) by way of periodical instalments over a definite period and that each such subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement, be entitled to the prize amount; Explanation.—A transaction is not a chit within the meaning of this clause, if in such transaction,

  • 1) Some alone, but not all, of the subscribers get the prize amount without any liability to pay future subscriptions; or
  • 2) All the subscribers get the chit amount by turns with a liability to pay future subscriptions

Non-Banking Finance Company: Section 45I (f) of RBI act, 1934 “Non?banking financial company” means

  • A "Financial Institution" which is a company;
  • 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 deposits, under any scheme or arrangement or in any other manner, or lending in any manner;
  • Such other Non?Banking Institution or class of such institutions, as RBI specifies

Non-banking institution means a company, corporation or co-operation society. NBFC should have more than 50% of total assets in financial assets (Intangible Assets) and more than 50% of total income arises from the aforesaid assets.

Asset Finance Company: Asset Finance Company (AFC) would be defined as any company which is a financial institution carrying on as its principal business the financing of physical assets supporting productive / economic activity.

AFC should have 60% of total assets in financing real/physical asset and 60% of total income arises from the aforesaid assets.

Investment Company: Investment Companies (IC) means any company which is a financial institution carrying on as its principal business of acquisition of securities.

IC should have 50% of total assets in investment activity and 50% of total income arises from the aforesaid assets.

Loan Company: Loan Company(LC) means any company which is a financial institution carrying on as its principal business the providing of finance whether by making loans or advances or otherwise for any activity other than its own but does not include an Asset Finance Company.

LC should have 50% of total assets in lending and 50% of total income arises from the aforesaid assets.

Core Investment Companies: CIC means an NBFC which carries on the business of acquisition of shares and securities and which satisfies the following conditions:

  • Not less than 90% of Net Assets should be in the form of Investment in Group Companies AND
  • Not less than 60% of Net Assets are held as equity stake in Group Companies

Infrastructure Finance Companies: Infrastructure Finance Companies (IFC) means a non?banking finance company which deploys at least 75 per cent of its total assets in infrastructure loans and Minimum Net Owned Funds – ? 3 Crores Acceptance of public deposit not allowed.

Factor: NBFC Factor means a company which carries on factoring business as its principal business and satisfies the following criteria:

  • Min NOF ? ? 5 Crores AND
  • At least 75% of its total assets should be financial assets AND
  • At least 75% of its gross income should be from factoring business

Micro Finance Institutions: An NBFC?MFI is defined as a non?deposit taking NBFC (other than a company licensed under Section 8 of the Indian Companies Act, 2013) that fulfils the following conditions:

  • Min NOF ? ? 5 Crores AND
  • Not less than 85% of its net assets are in the nature of “qualifying assets”

Infrastructure Debt Funds: "IDF?NBFC" means a non?deposit taking NBFC that has Net Owned Fund of ? 300 crores or more and which invests only in Public Private Partnerships (PPP) and post commencement operations date (COD) infrastructure projects which have completed at least one year of satisfactory commercial operation and becomes a party to a Tripartite Agreement.

MIN. ? 2 Crores at all the time unless otherwise specified

Banking Company: As per Section 5(c) of the Banking Regulation Act, 1949 a "Banking Company" means any company which transacts the business of banking in India.

Explanation: Any company which is engaged in the manufacture of goods or carries on any trade and which accepts the deposits of money from public merely for the purpose of financing its business as such manufacturer or trader shall not be deemed to transact the business of banking within the meaning of this clause."

Holding Company: A holding company is a company that owns other companies' outstanding stock. The term usually refers to a company that does not produce goods or services itself; rather, its purpose is to own shares of other companies to form a corporate group.

Parent Company: A parent company is a company that owns enough voting stock in another firm to control management and operation by doing and influencing or electing its board of directors; the second company being deemed as a subsidiary of the parent company.

Subsidiary Company: A subsidiary, subsidiary company or daughter company is a company that is owned or controlled by another company, which is called the parent company, parent, or holding company. The subsidiary can be a company, corporation, or limited liability partnership.



May Known As More for PVT

Our Suggestions

What is LLP?

Limited Liability Partnership (LLP), consortium of flexibility of partnership and the advantages of limited liability of a company at low compliance cost. In simple words LLP means body of corporate with mutually agreed agreement as like in partnership.

What is Pvt Ltd?

Company means a voluntary association formed and organized to carry on a business. In India Company means a company incorporated under Companies Act, 2013 or Companies Act, 1956 or under any previous company law.

What is LTD?

Bass Biz suggest to entrepreneurs who are interested to do business and raise capital through various sources can kick start their business as Pvt Ltd.In India Company means a company Companies Act, 1956 or under any previous company law.

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