Classification of company according to companies ordinance 1984

Classification of company under company ordinance 1984

Classification of company

Companies are divided into different types based on their mode of incorporation, liability of partner or members.

According to companies ordinance 1984 companies are divided into different types like

• Statutory company
• Chartered company
• Government company
• Company limited by Guarantee
• Company limited by shares
• Single member company

Statutory company

According to companies ordinance 1984, the companies which are formed under special statues are known as statutory company. Once the statutory company registered then they are governed by the statues or act or ordinance, though which companies are registered. Their precise nature varies by jurisdiction, it might be ordinary company owned by government with or without shareholders.

• State bank of Pakistan
• Small business finance corporation
• Investment corporation of Pakistan

Chartered company

As per companies ordinance 1984, all those companies which are formed under special charter granted by Govt of Pakistan. Normally these companies enjoy extra certain exclusive rights and privileges on other association of person.

A chartered company is an association formed by investor or shareholders for the propose of trade. 

• East India company
• Balance logistics & Relocation

Government company

Under provision of companies ordinance 1984, all companies in which 51% shares are owned by Government is called Government company.

If any company is subsidiary of Government company will automatically become Government company. 

• Small and medium enterprises Bank
• National Bank of Pakistan
• National insurance company
• State life insurance corporation
• Sui Northern Gas pipeline Ltd.

Company limited by Guarantee

According to companies ordinance 1984, Company limited by Guarantee means all those companies in which liability of members is limited upto the amount by which member have guaranteed to contribute in the event of winding up of company.

In company limited by Guarantee, there are no shares, mean no shareholders. Here company have members instead of shareholders.

Company limited by shares

Under provision of companies ordinance 1984, we divide companies limited by shares into two category

• Private limited company
• Public limited company

Private limited company

All those companies which are formed under companies ordinance 1984, but cannot issue shares to public is called private limited company.

These companies have more than 2 but less than 50 members. Liabilities of members are limited or unlimited according to the type of company. In private limited company member can transfer their shares to another member but cannot transfer it to locally. Private limited companies are exempted to file a prospectus to registrar, to hold statutory general meeting or to maintain annual reports etc.

It can start their operation after receiving the certificate of incorporation. It’s a great option if you want limited liability and good control over business and maintain privacy.

Public limited company

All those companies which are formed under companies ordinance 1984, and can issue shares to general public known as public limited company.

Minimum 7 members are required to form public ltd company and there is no limit for maximum members. Public limited company has separate legal entity over members. Its mean it is not effected by death or retirement of member. It is compulsory to produce prospectus and submit to registrar. In public ltd company, business can be started after receiving of certificate of commencement.

Annual general meeting, statutory meeting and prepare annual reports is compulsory.

Listed company

If company can trade their shares on country stock exchange known as listed company.

Unlisted company

Here company cannot trade their sales on stock exchange market.

Single member company

These types of companies formed under companies ordinance 2002.It is similar to sole proprietorship but the liability of owner is limited and his personal shares are not at risk if company liquidated.