3.3 Types of registered companies CA classifies registered companies according to: Liability of members on winding up Public or pty status Holding and subsidiary companies 1. Classification according to liability of members on winding up There are 4 companies that make up this classification we consider 1 & 2 – Company limited by shares Company limited by guarantee Unlimited company (very rare) No liability company Company limited by shares (s 112(1)) Def: the liability of shareholders to contribute to liabilities of company on winding up is limited to the amount, if any, unpaid on their shares (ss 9; 516 CA) Name: must have or at end of its name (ss 148(2); 149) “Ltd” “limited” Public or pty: can be either (s 112(1)) Use: exclusively used for trading Prevalence: most common form of company in our society Company limited by guarantee Def: liability is limited to the amount members undertake to contribute in the winding up of the company (ss 9; 517) Name: must have or at end of its name (ss 148(2); 149) “Ltd” “limited” Public or pty: can only be incorporated as a public company (s 112(1)) Share capital: NA because it is only limited by guarantee Use: generally used as NFP eg. RACQ 2. Classification according to public or pty status Public company Def: A company other than a pty company (s 9) Name: must have or at end of its name “Ltd” “limited” (ss 148(2); 149) Shareholdings: public companies have shares spread amongst a large number of shareholders, to enable equity funding for large projects NB. Needs at least 3 directors (s 201A) and directors can only be removed by members in general meeting passing ordinary resolution (ss 203D; 203E) Proprietary company Def: A company registered as a pty company (s 9; s 45A(1))
3.3 Types of registered companies CA classifies registered companies according to: Liability of members on winding up Public or pty status Holding and subsidiary companies 1. Classification according to liability of members on winding up There are 4 companies that make up this classification – we consider 1 & 2 Company limited by shares Company limited by guarantee Unlimited company (very rare) No liability company Company limited by shares (s 112(1)) Def: the liability of shareholders to contribute to liabilities of company on winding up is limited to the amount, if any, unpaid on their shares (ss 9; 516 CA) Name: must have “Ltd” or “limited” at end of its name (ss 148(2); 149) Public or pty: can be either (s 112(1)) Use: exclusively used for trading Prevalence: most common form of company in our society Company limited by guarantee Def: liability is limited to the amount members undertake to contribute in the winding up of the company (ss 9; 517) Name: must have “Ltd” or “limited” at end of its name (ss 148(2); 149) Public or pty: can only be incorporated as a public company (s 112(1)) Share capital: NA because it is only limited by guarantee Use: generally used as NFP eg. RACQ 2. Classification according to public or pty status Public company Def: A company other than a pty company (s 9) Name: must have “Ltd” or “limited” at end of its name (ss 148(2); 149) Shareholdings: public companies have shares spread amongst a large number of shareholders, to enable equity funding for large projects NB. Needs at least 3 directors (s 201A) and directors can only be removed by members in general meeting passing ordinary resolution (ss 203D; 203E) Proprietary company Def: A company registered as a pty company (s 9; s 45A(1))