A company may be defined as an artificial person recognized by law, with a distinctive name, a common seal, a common capital comprising a transferable share of fixed value; carrying limited liability, and having a perpetual succession. The types of Joint Stock Company is shown below:
Types of the joint-stock company
There are three (3) types of Joint Stock Companies. They are:
- Chartered company
- Statutory Company
- Registered company
The registered company can be of two (2) types:
- Limited company
- Unlimited company
Again limited company can be of two (2) types:
- Private limited company
- Public limited company
The public limited company can also be of two (2) types:
- A company limited by shares
- A company limited by guarantee
Other kinds of Joint Stock Company:
- Government company
- Non-government Company.
1. Chartered Company: Formerly in Great Britain, the government, through the Royal Charter formed companies for specific purposes, e.g. East India Company. A chartered company is regulated by the terms of its charter. In India, such companies are foreign companies.
2. Statutory Company: A company or corporation, formed by an act of the legislature, is called the statutory company. Examples are the Reserve Bank of India. Industrial Finance Corporation, Life Insurance Corporation, etc.
3. Registered Company: A company must be registered under the Companies Act. After registration, the Registrar of Companies issues a certificate of incorporation. After that, the company becomes a registered company. Broadly there are two types of registered companies, such as:
Limited Company: A limited liability company is a company whose liability of each member is limited to the face value of the shares held by him and the capital of the company is divided into a number of shares. This type of company is of two types, viz-private limited company, and public limited company.
(a) Private Limited Company: A Private Limited Company means a company which by its articles of associations:
- Restricts the right to transfer ht shares;
- Limits the number of its members to fifty excluding persons who are in the employment of the company; and
- Prohibits any invitation to the public to subscribe to the share or debentures of the company.
(b) Public Limited Company: It is a voluntary association of at least seven or more persons, authorized and recognized under the law as a separate legal entity apart from its owners who agree on the supply capital and share the profits and losses. A public limited company may be of two types, viz. a company limited by shares and a company limited by guarantee.
- Company Limited by Shares: In this company, there is share capital, and each share has a fixed nominal value, which the shareholder pays at a time or by installments. A shareholder is not liable to pay anything more than the fixed value of the shares subscribed; whatever may be the liabilities of the companies. Most of the companies in Bangladesh belong to this class.
- Company Limited by Guarantee: In Such a company, each member promises to pay a fixed sum of money in the event of liquidation of the company. This amount is called the guarantee. Sometimes the members are required to buy a share of a fixed value and also give a guarantee for a further sum in the event of a liquidation. There is no liability to pay anything more than the value of the share (where there is a share) and the guarantee.
Unlimited company: In these companies, the liability of the shareholder is unlimited as in partnership firms. Such companies are permitted under the Companies Act but are non-existent.
Other Content of Joint Stock Company: