Kinds of companies

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Kinds of Companies I.
UNLIMITED COMPANIES
* Main advantage of Company to trade with limited liability
* Yet you can set up Company with unlimited liability
* “Seven or more personsor where the Company to be formed will be a Private Company any two or more persons may form an incorporated Company with or without limited liability
* A Company with no limit on its liability isan unlimited Company
* very rare
* Suitable
* Where heavy liability not likely
* And advantages of separate corporate personality required
* To have
* Articles ofAssociation -> stating number of members and share capital
* To be registered
➢Disadvantage.-
* Members liable like in partnership
* But creditors cannot go directly to members canask only to contribute
➢Advantages
* Need not have share capital
* Reduce or increase its capital
* Purchase its own shares

* Unlimited Company may at anytime convert itself asLimited Company

GUARANTEE COMPANIES
* Limited liability means a)Limit liability by shares b) Or by Guarantee
* “The Memorandum of a Company limited by Guarantee shall... state that eachmember undertakes to contribute to the assets of the Company in the event of its being wound up, for payment of the debts and liabilities of the Company, such amount as maybe required not exceeding aspecified amount”
* Not necessary to have share capital
* If it has share capital a) Subject to restriction applicable to Company with shares b)No liberty to purchase own shares
* Onlymembers have right to participate in divisible profits of Company
* Division of capital into units is shares

FOREIGN COMPANIES
* Means a Company incorporated outside India
*Section 591 Company though incorporated outside India, has a place of business in India
* Place of business a)Substantial activity is carried on b)Business like operations are carried on or a...
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