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Microlesson · 5-min read

Classification of Companies — Overview

# Classification of Companies — Overview

Companies under the Companies Act, 2013 can be classified on five bases.

## The Classification Tree

### 1. Based on Liability

TypeSection
Company limited by sharesSection 2(22)
Company limited by guaranteeSection 2(21)
Unlimited liability companySection 2(92)

### 2. Based on Members

TypeSection
One Person Company (OPC)Section 2(62)
Private CompanySection 2(68)
Public CompanySection 2(71)
Small CompanySection 2(85)

### 3. Based on Control

TypeSection
Holding & Subsidiary CompanySection 2(87)
Associate CompanySection 2(6)

### 4. Based on Capital (Listing Status)

TypeSection
Listed CompanySection 2(52)
Unlisted Company

### 5. Other Companies

TypeSection
Government CompanySection 2(45)
Foreign CompanySection 2(42)
Non-profit Company (Section 8)Section 8
Dormant Company
Nidhi CompanySection 406

## Memory Aid: 'LMCCO'

  • Liability
  • Members
  • Control
  • Capital
  • Others

Worked example

### Example 1

Q: On what bases can companies be classified under the Companies Act, 2013?

A: Companies can be classified on five bases: (i) Liability; (ii) Members; (iii) Control; (iv) Capital; and (v) Other special categories such as Government, Foreign, Section 8, Dormant, and Nidhi companies.

⚠️ Common exam mistakes

  • Mixing up the section numbers — especially Section 2(68) (private) and Section 2(71) (public)
  • Forgetting that an OPC is itself a type of private company despite being a separate classification
  • Confusing 'control-based' classification (holding/subsidiary) with 'capital-based' classification (listed/unlisted)
Reference: — Companies Act, 2013
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