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Microlesson · 5-min read

Classification of Companies - Overview

# Classification of Companies

Companies under the Companies Act, 2013 can be classified along five dimensions:

## The Five Bases of Classification

BasisTypesKey Sections
LiabilityLimited by shares / Limited by guarantee / Unlimited2(22), 2(21), 2(92)
MembersOPC / Private / Public / Small2(62), 2(68), 2(71), 2(85)
ControlHolding & Subsidiary / Associate2(87), 2(6)
Capital (listing)Listed / Unlisted2(52)
OtherGovernment / Foreign / Section 8 (non-profit) / Dormant / Nidhi2(45), 2(42), Sec 8, Sec 406

## Visual Map

```

CLASSIFICATION OF COMPANIES

|

--------------------------------------------------------

| | | | |

Liability Members Control Capital Other

| | | | |

  • By shares - OPC - Holding & - Listed - Government
  • By - Private Subsidiary - Unlisted - Foreign

guarantee - Public - Associate - Section 8

  • Unlimited - Small - Dormant
  • Nidhi

```

## Why Multiple Classifications?

The same company can fall into multiple categories simultaneously. For example:

  • A company can be a Private Company (by members), Limited by Shares (by liability), Unlisted (by capital), and a Subsidiary (by control) - all at once.

Learn each classification with its defining section - that's how exam questions test you.

Worked example

### Example 1

Q: Classify 'Tata Consultancy Services Ltd' across all five dimensions.

A:

  • Liability: Limited by shares
  • Members: Public company
  • Control: Subsidiary of Tata Sons (holding company)
  • Capital: Listed company
  • Other: Not government, not foreign, not Section 8

⚠️ Common exam mistakes

  • Treating classifications as mutually exclusive - they are NOT. A company belongs to several categories at the same time.
  • Forgetting that Section 8 (non-profit) is classified under 'Other Companies', not under 'Liability'.
Reference: Various — Companies Act, 2013
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