Company Registration Coimbatore
‘Limited Company’. It means a company limited by shares or by gurantee.The liabilirty of the members, in the case of a limited company, may be limited with reference to the nominal value of the shares, respectively held by them or to the amount which they haved respectively guaranteed to contribute in the event of winding up of the company.Accordingly, a limited company can be further classified into (a) company limited by shares, and (b) company limited by guarantee. These are discussed below.
Companies Limited by Shares
a company limited by shares is a registered company where the ;liability of its members is limited by its Memorandum of Association to the amount, if any, unpaid on the shares respectively held by them. Accordingly, no member of a company limited by shares, can be called upon to pay more than the nominal amount of the shares held by him. If his shares are fully paid-up, he has nothing more to pay. But in the case of partly-paid shares, the unpaid portion is payable at any time during the existence of the company on a call being made, whether the company is a going concern or is being wound up. This is the essence of a company limited by shares and is the most common form in existence.
Companies Limited by Guarantee
A company limited by guarantee or a “guarantee company” is a registered company having liability of its members limited by its memorandum to such amount as the member may respectively undertake to contribute to the assets of the company in the event of its winding up. Clubs, trade associations and societies for promoting different objects are examples of such a company. It should be noted that a special feature of this type of company is that the liability of members to pay their guaranteed amounts arises only when the company has gone into liquidation and not when it is a going concern.
The Memorandum of Association of every guarantee company must state that every member of the company undertakes to contribute to assets of the company in the event of its being wound up while he is member for the payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the charges, cost and expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.
The Memorandum of a company limited by guarantee must state the amount of guarantee. It may be of different denominations.
In case of guarantee company having share capital the shareholders have two-fold liability: to pay the amount which remains unpaid on their shares, whenever called upon to pay, and secondly, to pay the amount payable under the guarantee when company goes into liquidation. The voting power of guarantee company having share capital is determined by the shareholding and not by the guarantee.
A guarantee company must include the word ‘limited’ or the words “private limited” as part of its name, and must register its articles, although it may adopt the provisions of the table ‘D’ of Schedule 1. It must also state the number of members with which it proposes to be registerd, although the number can be increased by means of a resolution.
