Entrepreneur Corner

Types of Companies

Limited Company

Limited Company can be of two types:

i.e. Limited by Shares and Limited by Guarantee

  1. Limited by Shares

    It is such a company in which the liability of the members is limited by the memorandum to the amount unpaid on the shares, if any. It can be a Public Company or a Private Company.

    If it is a public company, it can be listed on Stock Exchange or an un-listed company.

    If it is a private company, it can be a multi-member private company or a single member private company.

  2. Limited by Guarantee

    A Guarantee Company may be of two types: i.e. having share capital and (ii) not having share capital.

    In both cases, each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within one year afterwards, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for adjustment of the rights of the contributories among themselves such amount as may be required, not exceeding a specified amount.

Unlimited Company

In an un-limited company, the liability of the members is unlimited i-e. in the event of winding-up of a company, if the assets of the company are not sufficient to pay its liabilities, then the property of the members may be utilized for payment of company’s liabilities.