A company is defined as an artificial legal entity created under the Companies Act. It has key characteristics such as being a separate legal entity, having perpetual existence, limited liability for members, and separation of ownership and management. The document discusses the different types of companies in India according to the Companies Act - One Person Company (OPC), Private Limited Company, and Section 8 company for non-profit activities. Private Limited companies have a maximum of 200 members and 2-15 directors, while OPCs can only have one member but up to 15 directors. Section 8 companies are for charitable goals and cannot pay dividends.

1. The essential characteristics of
company with its types and difference
between Memorandums of Association &
Articles of association.

2. What is Company..!!??
 Section 2(20) of the Companies Act, 2013 defines a company to mean a
company incorporated under this Act or under any previous company
law.
 Chief Justice Marshall – “A corporation is an artificial being, invisible,
intangible, existing only in contemplation of the law. Being a mere
creation of law, it possesses only the properties which the Charter of its
creation confers upon it, either expressly or as incidental to its very
existence.”

3. Essential Characteristics of a Company
1. Legal person – It is created by law. It is considered as a person in the eyes of
law.
2. Artificial person – It has no body and mind of its own. It can act only through
other persons elected for the purpose.
3. Continued existence – A company has a life of its own distinct from the life of
its members. So the death of a member will not affect the life of the company.
4. Limited liability – The liability of the members are limited to the extent of the
face value of the shares held by them.
5. Freely transferable – Shares of a company are freely transferred except in case
of a private company.
6. Can buy and sell assets – A company at its own discretion can buy or sell any
asset.

4. 7. Can sue and be sued – A company like any other person can sue a third party
and be sued.
8. Separation of ownership and management – A company is managed through a
board of directors elected by its members. A member has no right to participate
in the management of its day-to-day affairs.
9. Common seal – Every company should have a common seal of its own. It is
similar to the signature of a natural person.

5. Types of company
 The Companies Act, 2013 differentiates companies based on the number of
members. The Micro, Small and Medium Enterprises (MSME) Act classifies
companies into micro, small and medium companies to grant them MSME
benefits. Companies can also be classified based on the liability of their
members, company ownership and listing status. The various types of
companies based on different parameters are covered below.
 Entrepreneurs can register different types of companies under the Companies
Act, 2013 (‘Act’) in India to conduct their business and provide a legal structure
for the business. The different types of companies are as follows:

6. One Person Company
 The Act introduced the concept One Person
Company of a . As per the Act, an OPC is a
company that has only one member. The
member can also be the director of the
company. Though the OPC should have only
one member, it can have a maximum of
fifteen directors.

7. Private Limited company
 It is a company where there cannot be more than
200 members. A minimum of two members are
required to establish a private limited company.
The members cannot transfer their share, and it is
suitable for businesses that prefer to register as
private entities. There needs to be a minimum of
two directors, and there can be a maximum of 15
directors in a private limited company.

8. Section 8 company (NGO)
 An association of persons or individuals
can register a company of the Act for charitable
purposes. These companies are established to
promote commerce, science, art, education,
sports, research, religion, social welfare, charity,
the protection of the environment, or such other
objects. The company should apply its profits and
other incomes to promote its activities. Such
companies intend to prohibit any dividend
payments to their members.