According to the modes of incorporation, companies may be classified into three categories, i.e. (1) Registered companies, (2) Statutory companies, (3) Chartered companies.
1) Registered Companies:
The companies formed and registered under the Indian Companies Act, 1956 are called registered companies. The working of such companies are regulated by the provisions of the Companies Act. These companies may be limited by -hares or limited by guarantee or unlimited companies. Any entrepreneur can take up such company.
(2) Statutory Companies:
The companies established by a Special Act of the Parliament to State Legislature are called statutory companies. Such companies are governed by their respective Acts. Statutory companies may not use the word ‘Ltd.’. Some of the important statutory companies in India are Reserve Bank of India, Industrial Finance Corporation of India, Industrial Development Bank of India, Life Insurance Corporation of India etc. Individual entrepreneur has hardly any scope for such type of company.
3. Chartered Companies:
The company which is incorporated under a special royal charter issued by the king or head of the state is called chartered company. Such companies are popular in England. In India such type of company is not found and entrepreneur cannot start this type of company. The East India Company, Bank of England, Hudson’s Bay Company were incorporated as chartered companies.