Types of Companies in India
In this article we discuss types of companies in India. We will provide a detailed explanation and list of India’s various types of companies based on different criteria. Are you considering starting your own business? If so, it’s important to understand that in India, companies come in various forms, each with its own legal structure. The Companies Act of 2013 classifies companies based on factors such as the number of members, size, liability, control, access to capital, and ownership.
Keep reading to discover the different types of companies in India.
List of Different Types of Companies in India
The table below provides a list of the different types of companies in India, categorized according to various criteria:
| Criteria | Types of Companies |
| Based on the number of members | Private Limited Company |
| Public Limited Company | |
| One Person Company | |
| Based on the liability of the members | Companies Limited by Guarantee |
| Companies Limited By Shares | |
| Unlimited Company | |
| Based on the size | Small Companies |
| Micro Companies | |
| Medium Companies | |
| Based on control | Holding Company |
| Subsidiary Company | |
| Based on access to capital | Listed Company |
| Unlisted Company | |
| Based on ownership | Government Company |
| Foreign Company | |
| Associate Company | |
| Section 8 Company | |
| Dormant Company |
Overview of Different Types of Companies in India
Here is a brief overview of the different types of companies in India:
Public Limited Company
A Public Limited Company allows the general public to hold and trade shares as it is listed on the stock exchange. While there is no limit on the number of shareholders, at least seven members are required to establish this type of company.
Private Limited Company
A Private Limited Company is a privately owned business entity with limited liability, restricted to a maximum of 200 shareholders. Its shares cannot be publicly traded or transferred.
One Person Company (OPC)
An OPC has only one shareholder, who can also be the director. This structure allows full control over operations without requiring minimum share capital, making it ideal for small businesses aiming to limit liability.
Companies Limited by Guarantee
Also known as Guarantee Companies, these entities have members who pledge to contribute a specified amount to the company’s assets upon dissolution, limiting their financial responsibility.
Companies Limited by Shares
In a company limited by shares, members are only liable for any unpaid amounts on their shares. These companies can issue shares through an Initial Public Offering (IPO), with ownership determined by equity shares held.
Unlimited Company
This type of private company has no limit on the liability of its members, which may extend to personal assets if the company incurs substantial debt.
Small Companies
Defined by the Companies Act, 2013, small companies have plant and machinery investments under ₹10 crore and annual turnover below ₹50 crore. They benefit from various regulatory advantages.
Micro Companies
Micro companies have plant and machinery investments not exceeding ₹1 crore and an annual turnover under ₹5 crore.
Medium Companies
Medium companies have plant and machinery investments up to ₹50 crore and an annual turnover up to ₹250 crore.
Holding Company
A holding company owns and controls one or more other companies, known as subsidiaries, by holding more than half of their shares or controlling their boards of directors.
Subsidiary Company
A subsidiary company is controlled by a parent or holding company, which may be the sole or one of several owners. A wholly-owned subsidiary is entirely owned by the parent company.
Listed Company
Listed companies have their shares listed on the stock exchange, allowing them to be publicly traded.
Unlisted Company
Unlisted companies are privately owned and not listed on the stock market. Their shares trade over the counter, and they cannot raise public funds, offering greater operational control.
Government Company
A government company is one where more than 50% of the share capital is held by the central or state government or both.
Foreign Company
A foreign company is incorporated outside India but conducts business operations within India, either independently or in collaboration with local entities.
Associate Company
An associate company is significantly influenced by another company, typically through ownership of at least 20% of its shares. Joint ventures are a type of associate company.
Section 8 Company
Section 8 Companies, as per the Companies Act, 2013, are non-profits aiming to promote activities like commerce, art, science, education, charity, and environmental protection.
Dormant Company
A dormant company is inactive for a period, often for two consecutive financial years, but remains registered. These companies must maintain certain obligations, like keeping a minimum number of directors and filing specific documents.
The Bottom Line
Understanding the different types of companies in India is essential for aspiring business owners. Each type offers unique advantages and limitations, providing a framework for structuring your business according to factors like members, liability, size, control, access to capital, and ownership.