Exploring Corporate Structures: Understanding Different Types of Companies
1. Private Limited Company:
- Formation: Minimum two directors and shareholders.
- Articles of Association and Memorandum of Association are essential documents.
- Ownership: Restricted ownership; shares not publicly traded.
- Transfer of shares is subject to certain restrictions.
2. Public Limited Company:
- Formation: Minimum three directors and seven shareholders.
- Mandatory issue of a prospectus before shares are offered to the public.
- Ownership: Shares are freely traded on the stock exchange.
- No restrictions on the transfer of shares.
3. Limited Liability Partnership (LLP):
- Formation: Requires at least two partners.
- Detailed LLP agreement governing internal affairs.
- Ownership: Partners have limited liability.
- No concept of shares; ownership is based on partnership agreement.
4. One Person Company (OPC):
- Formation: Only one person required as both director and shareholder.
- Nominee mentioned for succession planning.
- Ownership: Limited liability for the single shareholder.
- Converts to a private limited company if turnover exceeds the prescribed limit.