Companies Are Classified in the Following Basis

There are many categories of companies which are classified on the following basis discussed below. 1.) On the Basis of Liability A.) Limited by Shares: Is the one where the liability of members is limited to the face value of shares that the members have in the Company. B.) Limited by Guarantee: Is the one where the liability of members is limited to a fixed amount which they have guaranteed on. This is where members have agreed to contribute their assets to pay the outstanding liabilities of the company in the event of winding up. C.) Unlimited Co: Is the one where the liability of members is unlimited. They have to pay the liabilities of the company from their personal assets. 2.) On the Basis of Members A.) Private Co: It is defined as the one with a minimum of twenty members but with a maximum of fifty members. B.) Public Co: Is defined as the one with a minimum of seven members but with no maximum number of members. 3.) On the Basis of Incorporation or Registration A.) Chartered Co: These companies come into existence under a special charter that is only issued by a monarch or a crown. B.) Statutory Co: They are incorporated under a special or separate act of legislature. C.) Registered Co: Their existence come about as a result of registration with the registrar of companies under the companies act. 4.) On the Basis of Ownership A.) Government Co: Is the one which the central government, state governments or the central government together with one or more state governments partly owns not less than 51% of the share capital of the company. B.) Non government Company: Is the one that is owned and managed by private investors. 5.) On the Basis of Nationality A.) Domestic Company: Is a company that is incorporated in the country. B.) Foreign Company: Is a company that is incorporated in a foreign country but has a place of business in a foreign country. 6.) On the Basis of Control A.) Holding Company: Is the one that owns more than 50% of nominal value of equity share capital of another company or is controlling the composition of the board of directors of another company. This means that it is a company that is controlling subsidiary company. B.) Subsidiary Company: Is the one that is controlled by a holding company since it owns less than 50% nominal value of equity share capital or is not controlling the composition of the board of directors of another company.