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Two or more person join together can form a Private Limited Company which is the most visible corporate format in India. The Companies Act, 2013 and the Companies Incorporation Rules, 2014 prescribes the procedure for incorporation of Private limited company. The Companies act 2013 and various Rules framed under it provide a legal framework for incorporation, management and administration of such companies. Individuals and non individuals like Indian and foreign Companies etc can become the shareholders of such companies. The minimum number of persons required to form a company is two and it can have shareholders upto a number of Two hundred. The management of company is administered by Board of directors. d Private Limited companies are one of the most attractive venue for Foreign Direct Investment.
Public Limited Company is registered under the Companies Act, 2013 which can do the business on Pan India basis. It is a separate entity different from its promoters who can be individuals or non individuals like Companies or LLPs. The shares of the Public Company can be listed in stock exchanges and make general public its co-owners with its promoters. It is called public companies because of the large participation of general public in its capital and the utilization of public fund for its operation. Being capital intensive and larger geographical coverage, success of such public companies will impact general public also. Depending on the listing of its securities like share or debentures such companies will be further classified as Listed Public Companies and Unlisted Public Companies. The compliance requirement of public companies are more due to the larger public involvement, wider shareholding and public fund utilization. Unlike private companies, shares of the public companies are freely transferable. Compulsory dematerialization of the shares of the public companies, eases the process of transfer of such shares.
The Companies Act, 2013 has paved the way for introduction of One Person Company (OPC) in Indian corporate world which it was eagerly waiting for. It is a legally sanctioned and chartered form of a Proprietary Business with limited liability to its sole shareholder. A resident individual who is an Indian citizen is entitled to start a One Person Company (OPC) with the name and objectives which he chose. It is a separate legal entity different from its sole promoter with limited liability.
Section 8 of the Indian Companies Act 2013 permits to register companies with charitable motive with objective of promotion of commerce, art, science, social welfare, sports, research, religion, charity, education, protection of environment or any similar objective and they are not permitted to make any profit.
A Section 8 Company can carry on commercial activities and the surplus derived from such activities shall apply for promotion of its objects. They are not permitted to distribute its surplus to its shareholders in the form of dividend. Such companies are not required to keep the words Limited or Private Limited as part of its name.
Section 8 Companies can be registered as private or public company depending the number of its shareholders .