What are the Types of Joint Stock Companies:
The following types of Joint Stock Companies are discussed below.
- Chartered Company:
It is a kind of Joint stock company created by the grant of a Royal Charter is called a Chartered Company. The Bank Of England, The East India Company, Chartered Bank etc. are the examples of chartered companies. After the passing of Companies Ordinance 1984, no new company can be formed by a Royal Charter in Pakistan.
- Statutory Companies:
The companies which are formed or incorporated by a special act of parliament or an Ordinance are known as statutory companies. The State Bank of Pakistan, The National Bank of Pakistan, Pakistan Industrial and Credit Investment Corporation, WAPDA etc are the examples of such companies.
- Registered Company:
A company which is formed and registered under the companies Ordinance 1984 is known as a registered company. A registered company comes into existence when its registration is complete and a certificate of incorporation is issued. The Companies Ordinance provides registration of following types of companies;
- Company Limited by Shares
- Company Limited by Guarantee
- An Unlimited Company
- Association not for Profit
- Classification on the basis of Ownership
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- Company Limited by Shares:
In this type of registered company the liability of its members is limited up to the value of the shares purchased by them. It is essential for such companies to use the word ‘limited’ at the end of their names so that the people know that the liability of its members is limited.
2. Company Limited by Guarantee:
Company Limited by Guarantee is the company in which the liability of its members is limited up to the amounts guaranteed by each member at the time of winding up the company and not during the lifetime of the company. This type of company is formed mostly when work is of non-profit making nature.
- An Unlimited Company:
In this type of company the liability of the members is unlimited. In a case of insolvency, every member of the company is liable for the payment of company’s debts. If in the event of winding up the assets of such company are insufficient to pay its liabilities then members are called to contribute their personal assets to settle the debts.
- Association Not for Profit:
Association not for profit is registered under section 42 of the Companies Ordinance without the addition of the word ‘limited’ to its name. It is registered with limited liability. The association not for profit is formed for promoting commerce, art, science, religion, charity or any other object.
Types of Joint Stock Company on the basis of Ownership
- Holding Company:
A holding company is a company, which owns or holds all, or more than 50% of the share capital of the other company or it has control of more than 50% of its directors.
A company, which operates its business under the control of another company (i.e holding company), is known as a subsidiary company.
- Formation of a board of directors is controlled by another company.
- The other company controls more than half of the voting rights of this company.
- The another company owns more than 50% share capital of this company.
3. Government Companies:
A government company is a company in which at least 51% of the paid-up capital has been subscribed by the government.