KINDS OF COMPANY

The different kinds of company are as follows :

1. According to Incorporation :
Companies are classified according to Incorporation
as follows :

 Chartered Company : A company which is formed under a special

charter granted by the King or Queen is called chartered company. The
powers, liabilities and nature of the business of such company are explained
by the charter.
 Statutory Company : A company which is formed by a special which is
formed by a special act of the Parliament or by order of the head of the state
is called a statutory company.
 Registered Company : A company which is formed under the Companies
Act 2017 is called a registered company. It also includes existing
companies registered under previous laws.
 Foreign Company : According to Sec 2(1)(35), foreign company means
any company incorporated outside Pakistan, which has a piece of business
or offices in Pakistan.

2. According to Liability :
Companies are classified according to Liabilities as follows :

 Company Limited by shares : A company limited by shares means a

company in which liability of members is limited up to the nominal value
of shares held by them. [Sec. 2(1)(20)]
 Company Limited by Guarantee : A company limited by guarantee
means a company in which the liability of members is limited to such fixed
amount which members undertake to contributes to the assets of the
company in case of winding up. [Sec. 2(1)(19)]
 Unlimited Company : Unlimited company means a company in which the
liability of the members is unlimited. It means that the personal assets of
the shareholders can be used to pay the debts of the company. [Sec.
2(1)(71)]
3. According to Ownership and Control :
The following are kinds of companies according to
ownership and control :

 Private Company : A private company means a company which by

articles: [Sec. 2(1)(49)]
I. Restricts the rights to transfer it’s shares.
II. Limits the number of members to 50, not including persons who are
in the employment of the company.
III. Prohibits any invitation to the public to subscribe for the shares.
 Public Company : A public company means a company which is not a
private company. It means that company may invite the general public to
subscribe for its shares or debentures. At least 3 members are required to
form a public company.
 Public Sector Company : A public sector company means a company,
whether public or private which is: [Sec. 2(1)(54)]
I. Controlled and owned by Government.
II. In which the Government has power to elect or appoint majority of
its director.
III. Includes a public sector association not for profit.

 Holding and Subsidiary Company : A holding company is one that

controls the composition of board or controls more than 50% shares of
another company. A company whose composition of board is controlled or
more than 50% shares are held by the holding company is called
Subsidiary Company.
 Associated Company and Associated Undertaking : Two or more
companies or undertakings are considered to be associated if they are
interconnected in the following manners:
I. If companies are under common management or control.
II. If a company is subsidiary of another company.
III. If the undertaking is a Modaraba managed by a company.
4. According to Companies Act, 2017

The following companies are kinds of companies according to the Third

Schedule of the Companies Act, 2017: [Sec. 224]
 Public Interest Company : it includes the following :
I. A public sector company ; or
II. A public utility company carrying on the business of essential public
service; or
III. Such number of members holding ordinary shares as may be
notified.
IV. Assets exceeding such value as may be notified.

 Large Sized Company : It includes the following :

I. Non-listed company with :
 Paid up capital of Rs.200 million or more; or
 Turn over of Rs. 1 billion or more; or
 Employees more than 750.
II. Foreign company with turn over of Rs. 1 billion or more.
 Medium Sized Company : It includes the following :

I. Non-listed public company with :

 Paid-up capital less than 200M Rupees.
 Turn over less than 1B Rupees.
 Employees more than 250 but less than 750.

II. Private company with :

 Paid up capital of greater than 10M Rupees but not exceeding
Rs.200M.
 Turnover greater than Rs. 100M but not exceeding Rs. 1B.
 Employees more than 250 but less than 750.

 Small Sized Companies : A private company having :

 Paid-up capital to Rs. 10M.
 Turnover not exceeding 100M Rupees.
 Employees not more than 250.
5. Miscellaneous :
 Association not for profit : The commission registers an association not
for profit under the following condition : [Sec. 42]
I. It is formed to promote commerce, art, science, religion, health,
education, research, sports, social welfare and other useful objects.
II. It will apply its profits to promote its objects.
III. It will not pay dividend to its member.
 Shariah Compliant Company : Shariah compliant company means a
company which is conducting its business according to the principles of
Shariah. [Sec. 2(1)(64)]
 Free zone Company : A company incorporated for the purpose of
carrying on business in the export processing zone or a free zone shall
enjoy exemptions under this Act.
 Agriculture Promotion Company : A company related to produce
agriculture promotion or engaged in any activity connected with produce or
other related activities is called agriculture promotion company.
 Illegal Association : Any association or company consisting of more than
20 members is illegal unless it is registered as a company under the
Companies Act. [ SEC. 9 ]
It does not apply in the following cases:
I. Any society, body or association formed under any other Pakistani
law.
II. A joint family carrying on joint family business.
III. A partnership of 2 or more joint families where the total
members.excluding minors, does not exceed.