Intermediate · Paper 5 – Business Laws & Ethics · Companies Act, 2013 · 1:56
English
Transcript
Seven people, two people, or just one person. Can all of them form a company? Yes! Today, we see the big map of the kinds of companies.
Suresh and Anitha want to start a spice business in Erode. Which kind of company should they form?
Anitha: Suresh, there are so many kinds of companies! Where do we start?
Section 3 of the Companies Act, 2013 says a company may be formed for any lawful purpose. Seven or more persons can form a public company. Two or more persons can form a private company. And one person can form a One Person Company.
Suresh: We are two. So we can form a private company!
Next, by liability, a company may be limited by shares, limited by guarantee, or an unlimited company.
The Act also has many other kinds. Private and public companies. One Person Company and small company. Statutory and registered companies. Government and foreign companies. Holding and subsidiary companies. And associations not for profit, called Section 8 companies.
We will learn each of these, one by one, in the coming videos.
Exam tip! Remember the numbers in Section 3. Seven for a public company, two for a private company, and one for a One Person Company.
Let's recap. Section 3 allows a company for any lawful purpose. By members: public, private, and One Person Company. By liability: shares, guarantee, or unlimited. And many more kinds to learn.
Now try the test in the MPA app. In the next video, we will learn about the private company.