Classification of Companies.

12.1.4  Classification of Companies. Companies can be classified into three categories according to the mode of incorporation. If a company is incorporated by a charter granted by the monarch, it is called a Chartered Company and is regulated by that charter. For Example, the East India Company came into being by the grant of a Royal Charter. Such type of companies do not exist in India. A company which is created by a special Act of the Legislature is called a Statutory Company and is governed by the provisions of that Act. The State Bank of India and the Industrial Finance Corporation of India are two examples of statutory companies. A company brought into existence by registration of certain documents under the Companies Act, 1956 is called Registered Company.

The liability of members of a registered company may be limited or unlimited (s.12). It may be limited by shares, or by guarantee or by both (i.e., shares and guarantee).