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 Companies:
- 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 a 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 association:
- 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: