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3. Types Of Companies" [ Assessments of 'Companies']

 

1. Indian Company [Section 2(26)]

 

“Indian Company” means a company formed and registered under the Companies Act, 1956 and includes :

 

(i)         A company formed and registered under any law relating to companies formerly in force in any part of India other than the State of Jammu and Kashmir or and the specified Union Territories; [Sec. 2 (26) (i)]

(ii)        A corporation established by or under Central, State or provincial Act ; [Sec. 2(26) (ia)]

(iii)       Any institution, association or body which is declared by the Board to be a company: [Sec. 2 (26) (ii))]

(iv)       In the case of Jammu & Kashmir, a company formed and registered under any law for the time being in force in that State ; [Sec. 2 (26) (ii)]

(v)        In the case of any of the Union territories of Dadra and Nagar Haveli, Goa, Daman and Diu, and Pondicherry, a company formed and registered under any law for the time being in force in that Union Territory. [Sec. 2 (26) (iii)]

 

In all the above cases, the Principal office of the company, corporation, institution, association or body must be situated in India.

2. Company in which public are substantially interested [Section 2(18)]

 

A company is said to be a company in which public are substantially interested, if:

 

(i)         It is a company owned by the Central or State government or the Reserve Bank of India [Section 2(l8)(i)] ; or

(ii)        At least 40% of its shares (by monetary value) are held (singly or jointly by the Govt. or the Reserve Bank of India or a corporation owned by that Bank (Section 2 (18) (a)] or

(iii)       It is a company which is registered under section 25 of the Companies Act, 1956 (Sec. 2 (18)(aa)J ; or

(iv)       It is a company having no share capital and if, having regard to its objects, the nature & composition of the membership and other relevant considerations, it is declared by order of the Board to be a company in which the public are substantially interested provided that such order shall hold good for only such assessment year or years specified in the declaration [Section 2(1 8)(ib) ; or

(v)        It is a mutual benefit finance company. It is a company, which carries on, as its principal business, the business of acceptance of deposits from its members and which is declared by the Central Government under section 620 A of the Companies Act, 1956 to be a Nidhi or Mutual Benefit Society, [Section 2(1 8)(ic) ; or

(vi)       Society participating company. It is a company wherein shares (not being shares entitled to a fixed rate of dividend) carrying ‘at least 50% of the voting power have been held by one or more cooperative society, throughout the relevant previous year; [Section 2(1 8)(ad)1 or

(vii)      It is a company which is not a private company (as defined in the Companies Act, 1956) fulfilling any one of the following two conditions namely [Section 2(1 8)(b)J

(a)       Its equity shares were, as on last day of relevant previous year listed in recognised Stock Exchange in India.

(b)       Its equity shares carrying not less than 50% of voting power (40% in case of Indian industrial company) have been allocated unconditionally to or acquired unconditionally by and were held throughout the relevant previous year beneficially by

(i)         the Government, or

(ii)        corporation established by a Central State or Provincial Act, or any company in which public are substantially interested or its 100% Subsidiary company.

(viii)     Indian Industrial Company. It means an Indian company whose business consists wholly of the construction of ships or in the manufacture or processing of goods or in the mining or in the generation or distribution of electricity or any other form of power.

 

The income attributable to any or more of the aforesaid activities included in the total income of the previous year is not less than 51% of such total income.

3. Widely Held Company

 

A company in which the public are substantially interested is known as Widely held company.

4. Closely held Company

 

A company in which the public are not substantially interested is referred to as a Closely held company.

5. Domestic Company [Section 2(22A)]

 

Domestic company means an Indian company, or any other company, which, in respect of its income liable to tax under this Act, has made the prescribed arrangements for the declaration and payment, within India of the dividends (including dividends on preference shares) payable out of such income.

 

6.       Meaning of “the prescribed arrangement for declaration and payment of dividends within India” (Rule 27)

 

The share register of the company for shareholders shall be regularly maintained at its principal place of business within India in respect of any assessment year from a date not later than 1St day of April of such year.

(i)         The general meeting for passing the account of the previous year relevant to the assessment year for              declaring any dividends in respect thereof shall be held only at a place within India

(ii)       The dividends declared, if any, shall be payable only within India to all shareholders.

7. Foreign Company [Section 2(23A)]

 

A company which is not a domestic company.

8. Investment Company [Section 109 (ii)(i)]

 

Investment company is a company whose gross total income consists mainly of income chargeable to tax under the heads ‘Income form House Property, Capital Gains’ and ‘Income from Other Sources’.

9. Consultancy Service Company

 

Means an Indian Company whose business consists wholly of the provision of technical know- how or in rendering of services in connection with the provision of technical know-how, to other persons.

10. Trading Company [Section 109(iia)]

 

It means it company whose business consists wholly or mainly in dealing with goods or merchandise manufactured, produced or processed by a person other than that company and whose income attributable to such business included in its gross total income is not less than 51% of the amount of such gross total income.

11. Banking Company

 

Banking company means a company to which the Banking Company Regulation Act, 1949 applies and includes any Bank or banking institution referred to in Section 51 of that Act.

 
 
 
 
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