Company Registration: Different Types of Companies in India

A Company In General Terms Means People Gathered For The Prime Purpose Of Doing Business And Earning Profits Having A Legal Identity. In Legal Terms, A Company Is Defined In The Companies Act, 2013 Under Section 2 (20) As “A Company Incorporated Under This Act Or Under Any Previous Company Law”. There Are Different Types Of Companies Functioning At Present But The Companies Which Are Registered Under The Companies Act, 2013 Possess A Legal Identity And Are Recognised In India.

Many Companies Are Registered Every Year In India, In The Year 2021 Around 154 Thousand Companies Were Registered Out Of Which A Huge Number Of 151 Thousand Were Private Companies, This Data Clearly Indicates The Huge Number Of Registration Of Companies Per Year In The Country. This Makes It Necessary To Be Aware Of The Types Of Companies Under The Companies Act, 2013 That One Can Register To Have Clarity As To What Type Of Company Will Be More Suitable For A Particular Business.

There Are Certain Factors Based On Which Companies Are Differentiated Such As The Number Of People, Extent Of Liability And Shares, Basis Of Incorporation, And Domicile, And There Are Also Some Special Kinds Of Companies Provided Under The Companies Act, 2013. The Various Types Of Companies In India Under The Act Will Be Discussed In Detail.

Difference Between Public, Private Company and One Person Company

There Are Three Types Of Companies Based On The Number Of People: Public Company, Private Company And One-Person Company.

Public Company

A Public Company Is Defined Under Section 2(71) Of The Companies Act, 2013 As A Company Which Is Not A Private Company. Various Conditions That Need To Be Fulfilled; Lawful Purpose And At Least 7 Members, Minimum Of 3 Directors, And The Requirement To Add ‘Limited’ At The End Of The Company’s Name Are Provided Under Sections 3(1), 149(1) And 4(1)(A) Respectively. The Main Difference Between Public And Private Companies Is That The Shares Of A Public Company Can Transfer Shares And Debentures To The Public And According To The Provisions Of The Act A Private Company Which Is A Subsidiary Of A Public Company Will Be Considered A Public Company.

Private Company

Section 2(68) Of The Companies Act, 2013 Deals With The Private Company Which Is Defined As A Company Having A Minimum Paid-Up Shared Capital As Prescribed And Which By Its Articles Restricts The Right To Transfer The Shares And The Maximum Limit Of The Members Is 200 If Not A One-Person Company. A Private Company Can Be Started By A Minimum Of Two People And Shall Also Have 2 Directors. It Is A Must For A Private Company To Put ‘Private Ltd.’ At The End Of The Name Of The Company.

One Person Company

A One-Person Company (OPC) Is A New Type Of Company Introduced In The Companies Act, 2013 Which Authorises A Single Person To Open A One-Person Company Having At Least One Director.  In The Formation Of An OPC, It Is Important To Mention The Name Of A Nominee As There Is No Partner.

Limited Liability Company

Companies limited by shares, companies limited by guarantee and unlimited liability companies are three types of companies based on liability.

A company under which the liability of the members is directly proportional to the share invested by that member and the liability is exhausted once the shares are fully paid up. The companies limited by guarantee are those under which the liability is based on the extent of the guarantee taken by the members regarding the undertaking of a certain amount. The members work like co sureties for the company. The third type is prima facie understandable that there is no limit on the liability of its members.

The most used company is the company limited by shares, in the year 2021 the total number of active companies was researched and out of a total of 13,44,857 companies, 13,36,234 were companies limited by shares, the companies limited by guarantee were 8,317 and the least number of 306 was the unlimited liability companies.

Know more about Partnership Firm and Partnership Agreement

Statutory Company v/s Registered Company

There are two types of companies based on the factor of incorporation as to how these companies were incorporated: statutory companies and registered companies.

Statutory companies are those companies which are specially constituted through passing an act or a statute in the parliament aimed to provide services to the public. The Companies Act, 2013 is applicable to the statutory companies to the extent this Act is in accordance with the statute passed for the formation of such companies. Some examples include the Reserve Bank of India and Life Insurance Corporation of India etc.

The other type is the registered companies, the companies which are registered under the Companies Act, 2013, these companies attain a legal identity and come into existence once they are registered as per the provisions of the Companies Act, 2013.


Indian Company is the company having a domicile in India and the other type under this category is the foreign company having its domicile outside India.

Foreign company is defined in the Companies Act, 2013 under section 2(42) as ‘Foreign company means any company or body corporate incorporated outside India which, has a place of business in India whether by itself or through an agent, physically or through electronic mode; and conducts any business activity in India in any other manner. The provisions which are applicable to these companies are provided under section 379 to section 393.

Special Companies Under The Companies Act, 2013

There are certain special companies under the Companies Act, 2013 such as Section 8 companies, government companies, dormant companies, small companies and so on.

Section 8 Company

Section 8 company is a company registered under this Act as a limited company which also holds a licence from the Central Government. This company generally has its objects related to the promotion of art, commerce, science, religion, welfare, and charity etc and uses all its profits for the same. Section 8 company is not obligated to put Ltd. Or Private Ltd. At the end of its name.

Government Company

A government company is defined under section 2(45) of the Companies Act, 2013 as a company of which at least 51% paid up shares are held by the Central Government, or by a State Government having a subsidiary company of such a government company.

Small Company

Small company is a company other than a public company, which has not more than 50 lakh rupees and if prescribed not more than 10 crores. Turnover of such a company shall not exceed 2 crores in a financial year and if prescribed not more than 100 crores rupees as defined under section 2(85) of the Companies Act, 2013.

Subsidiary Company

A subsidiary company is defined under section 2(87) as a subsidiary company or subsidiary in relation with any other company which is a holding company which controls the composition of board of directors and at least half of the voting power. A holding company in relation to one or more other companies, is a company of which such companies are subsidiary companies, a holding company is one supervising and regulating the subsidiaries.

Associate Company

Associate company is provided under section 2(46) of the Companies Act, 2013, as an associate company in relation to other company which has a significant influence which means at least 20% of the voting powers resides with that company but an associate company is not a subsidiary company.

Producer Company

Producer company is a legal body of farmers/agriculturalists aiming towards improving the standard of their lives, legally a producer company is a company having its objectives mentioned in section 581B and is registered under the Companies Act, 1956 which is still not repealed for the purpose of producer company.

Dormant Company

The last type of company is a dormant company which can also be called a company in a sleeping state which is registered for future purposes and have no present accounting transactions. A company which is not active can acquire the status of a dormant company.

These were all the types of companies in India under the Companies Act, 2013 and some special companies as well.

There are a lot of different types of companies present nowadays and it may be confusing for people to conclude which type of company they can register to carry on the business they want. Expertkhoj can guide you on how to register your company and the legal aspects of the type of company you choose. To get an online legal consultation with your lawyer, book an appointment through our “Online Consultation” page.

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