1. Companies limited by.shares.Acompan N haNingthehabilitsofits members limited by Use memorandum to the amount if am, unpaid on Hue shares rcSpeClfN Ely held by them is termed -a company lurched by shares' [Sec. L2(2)(a!]. Such a company is popularly called as lathed liability COlllpdllY The liability can be enforced at any time doming Hue existence and also during the Minding up of the company. Such a company must have share capital as the extent of liability is determined by the face value of shares. Most of the companies in India are of Ibis type and it is with companies of this class that w e are manly concerned.
2. Companies limited by-guarantee. A com.panylnmitedbygnarantee tray be destined as -a company having the liability of has members limited by it memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up ' [Sec. 12 (2)(b)]. The molt guaranteed by each member cannot be denuded until Hue company is wound up, hence, it is in the nature of a
reserve capital - it is to be obscene ad that in tins type of companies the liability of Use members can only be implemented after the commencement of winding up of the company, whereas in the case of companies limited by shares the liability if any, can be enforced at any time during Use existence as well as doting winding up of the company
Non-trading purposes. Such companies may or may not have share capital.. But they are formed generally let share capital for non-trading purposes. e.g., for the promotion of commerce, art, science, culture, sports, etc., because if they are formed for trading purposes, They must, in practice. possess a share capital for carrying on business, and the registration of a g ternate company with a share capital world be: in no way better than registration in the modular way as a company Ignited by shares: The Chambers of Converse, trade associations and sports clubs are usually guarantee companies because neither they require huge capital nor aim at ma profit. The articles of association of such a company must state the number-of members with hail the company is to be registered.
3. 1 Infinite to ordnances A company ham no limit on the liability of its members is an unlimited company [Sec. 1 292)(c)]. Thins Use liability My of members in this type of companies is unlimited, i.e., it may extend to the personal property of U e members. every member is liable to