The mode of incorporation refers to the process by which a company is formed. There are three main types of companies based on their mode of incorporation:
- Chartered companies are formed by a Royal Charter or by an Act of Parliament. They are the oldest type of company and are typically granted special privileges or powers. For example, the East India Company was a chartered company.
- Statutory companies are formed by a special Act of Parliament or by a state legislature. They are typically created to perform a specific public purpose, such as the Reserve Bank of India.
- Registered companies are formed by registering with the Registrar of Companies. They are the most common type of company and are governed by the Companies Act, 2013.
MCQs
- Which of the following is not a type of company based on its mode of incorporation?
- Chartered company
- Statutory company
- Registered company
- Unlimited company
- The answer is Unlimited company.
- Which of the following is a chartered company?
- The Reserve Bank of India
- The Life Insurance Corporation of India
- The Food Corporation of India
- All of the above
- The answer is All of the above.
- Which of the following is a statutory company?
- A company formed by an Act of Parliament
- A company formed by a state legislature
- A company formed by registering with the Registrar of Companies
- None of the above
- The answer is A company formed by an Act of Parliament or by a state legislature.
- Which of the following is a registered company?
- A company formed by registering with the Registrar of Companies
- A company formed by a Royal Charter
- A company formed by an Act of Parliament
- None of the above
- The answer is A company formed by registering with the Registrar of Companies.
- Which of the following is the most common type of company in India?
- Chartered company
- Statutory company
- Registered company
- Unlimited company
- The answer is Registered company.