On the basis of the number of members, companies can be divided into three categories as follows:
(i) Public Company: A public company means a company which (a) is not a private company; (b) is a company which is not a subsidiary of a private company.
(ii) Private Company: A private company is one which by its articles of association: (a) Restricts the right to transfer its shares; (b) A private company must have at least 2 persons, except in case of one person company; (c) Limits the number of its members to 200 (excluding its employees).
(iii) One Person Company (OPC): Sec. 2 (62) of the companies Act, 2013, defines OPC as a “company which has only one person as a member”. Rule 3 of the Companies (Incorporation) Rules, 2014 provides that: (a) Only a natural person being an Indian citizen and resident in India can form one person company, (b) It cannot carry out non-banking financial investment activities. (c) Its paid up share capital is not more than Rs. 50 Lakhs (d) Its average annual turnover of three years does not exceed Rs. 2 Crores. |
