An organization that sells any product or service in exchange for money can be identified as a Company. When someone's organization takes a vast form and uses so many employees to run his organization, he can declare his organization as a company. He can also give it a name from which he can make his company's image worldwide.
Characteristics of a Company
When we want to convert our business into a company, we have to follow some rules, and if we do not follow these all, then maybe in future, the government can take any action against us. Let's see these all.
1. Members matter for your registration
Our constitution has a section for every company, known as a company act. According to that act, if you want to start a private company, then you should consume at least three members for a private company. If you're going to start a public company, it should contain at least seven members and only after this will you be able to take permission from the Indian government.
2. You have to purchase your Rights
While starting your company, you have to purchase your company's rights, and in that rights, you will be able to use your company's name, logo and some other properties. If any other organization uses this, you can take legal action against that organization.
3. A company can be known as an Artificial person
We can treat our company just like an artificial person, and thus we can purchase any property or anything else in our company's name. When we start our company, we can use it like an artificial person, and after that, we can begin an account in our company's name, and we can gather money in this account, which will come under that company. The most important thing related to a company's capital is that we can debit cash from our company's account only when board members agree.
4. Separate legal entity
It is the most significant advantage of having a company. When we say legal entity, it means that the person who works in this company will not be responsible for any debt. Let's see it with an example. Just assume you are the owner of a company and your company's net worth is approx 200 crore Indian rupees; now you will be able to take debt via bank on that company, and if, in any case, your company will not be able to give this money back to bank then the bank has no authority to take this money from your personal property even they can sell those properties which come under the company. Most people in business use this rule, and they take so many debts from their company's bank and use this money for themself/any other company. When their debt company goes into loss, they tell the bank to sell that company; in this case, the person who is the company's shareholder has to afford that loss.
5. Common seal
As we saw, a company works like an artificial person, but every person has their signature, just like humans. Every company has their stamp, which they use to show their customer that that company has provided the given product or service. Some stamp companies attach their address, too, and if you face any problem regarding their service, you can take legal action against that company.
6. Perpetual existence
A company is different from personal property. For example, we can sell our property, but we can not sell our company. Now you will think that there are so many companies who sold themself to another one. Still, in reality, the person who has a considerable share of that company sold his share to another; after that, the board member and CEO, Directors have the authority to change the company's name and logo. A company does not depend on a person, even not on their owner; sometimes, we can see that the CEO of the company has resigned from his company. Still, the company will work typically, and after his resignation, the board member will hire new CEO. In reality, we can say that a company exists, and no one has the authority to destroy it; only shareholders can sell their part to another. For example, we can see that the world's richest man, Elon Musk, has purchased twitter, but in reality, he did not purchase Twitter; he just purchased some shares of Twitter, and after that now, became the highest shareholder of Twitter, and now is the owner of 51 per cent twitters share which means if any board member, director, CEO or any other person want to take any action in Twitter, he has to take permission from Elon musk. Just like this, we can sell or buy any company's share, and we can never purchase a whole company.
Types of Companies
The net worth of a company and the number of members working in a company are the two most important factors, and because of that, we will divide our companies based on their members. Let's see the types of companies.
1. One person company
Maybe it seems awkward, and you can think about how only one person can start a company. Still, in the company section, it is legal; by using this section, you can create your own company without other members, and a single person will be the owner of the whole company, and he can sell 100 per cent share to any other one. The most important thing about this type of company is you don't need to ask someone while making any decision. ARADO farms and VISHRUT biotech are the best examples of this type of company.
2. Private company
To understand the concept of a private company, you have to understand the stocks, and only after that will you be able to understand the private company. Let's see something about shares and stocks.
What is a stock, and how it impacts several companies?
Stock is a concept of every industry in which companies divide their ownership into several parts, and anyone can purchase these stocks. After buying these stocks, you will be a small part of that company, and you can sell these stocks according to your needs. People purchase these stocks for their profit. For example, assume that you are buying some stocks of a company, and when the company's net worth increases, your stock's value will also increase, and if the company loses their net worth, then your stock's value will decrease. Currently, most people are purchasing stocks, generating good revenue from this. The most harmful thing related to the stock market is we should buy any stock at our own risk, and only after that can we generate revenue from the stock market.
Now we can understand the concept of a private company.
A private company is a company which keeps its shares privately, and only a few people can purchase their shares, and you can purchase their shares by contracting them personally.
3. Public Company
A public company is a company that opens its stocks to everyone, and you can purchase them via any trading app and not only purchase but you can sell them according to your profit. According to the companies act, a public company should contain at least two directors and enough shareholders who can purchase their stocks. A company can be defined as a public company when its net worth is more than 50000 US dollars. In actual words, we can say that public companies are totally based on the public, and the public can easily invest their money in these companies.
4. Government company
Any country's economy depends on its government-affiliated companies because these are places where governments generate good revenue. Let's see some other things related to a government company.
Any government start some companies for their profit and citizens' requirements, and the government holds 51 per cent shares of that company in its hand and the rest 49 per cent share they offer to every other individual in the company. Because of the maximum shares government have the authority to make any changes in that company.
Why do most traders like to invest their money in a government company?
Any company's growth depends on its government. Suppose you invest your money in a government company. In that case, the government will try to grow this company, and they will give significant projects to that company and from this company will generate huge revenue.
After reading this article, you can recognize the value of a company, and currently, every country's GDPs are based on some big companies. For example, you can see that one of the biggest companies, apple, contains a massive market in the technical field and its net worth is approx 2470.6 Billion US dollars which plays an essential role in America's GDP and because of some big companies currently America have become worlds largest economic company. Because of companies, so many people get a job. The worst thing about a company is that a significant portion of the money has occurred by a few companies, and poverty is becoming a big problem for every country. Another issue related to a company is that companies are upgrading themselves and launching many machines for their work. Still, because of these machines, many employees face unemployment.
You should know about some largest companies in the world
We can see so many giant companies, some of which are generating huge revenue. Let's see some top companies which make a considerable revenue worldwide.
Apple is the biggest company in the united state, and they have secured a good market in the technology field. Their current revenue is more than 2500 billion U. S dollars which is more than some countries' whole GDP. From this, you can understand the value of this tech company in modern days.
2. Saudi Aramco
Saudi Aramco is the biggest company in Saudi Arabia, and they have secured a good market in the oil industry and supply their product to almost every country. Their current revenue is more than 2170 billion U. S dollars.
Whenever we think about the words largest companies, this name comes to mind. They have captured a big software market, and not only this, but Microsoft has established so much software; without them, you can not complete your office work. Its current revenue is more than 2054 billion us. Dollar, and because of this biggest software company, bill gates have secured his name in the world's top 10 richest person list.
Another Information technology-related company in the united state that acquired so many companies under it but the biggest child company of it is google, and most of its revenue comes from this giant company. Their headquarters is in California, and their current revenue is more than 1581 billion US dollars.
Tesla is well known because it produces expensive world-class cars worldwide. Not only this, but they have also done so many things in space and research, and every year they launch their rockets for space. Motors are their primary source of income, but they also provide many products. The tesla owner is Elon musk, and because of this largest technology-based company, he has secured his name in first place in the list of the world's top 10 wealthiest people. Tesla's current revenue is approx 1083 billion US dollars.
Amazon.com is the world's most prominent place for online shopping, and you can purchase most things from here. Its supply chain market is fabulous; because of this, they have captured a good market in most of the country. July 15, 1994, was the date when its founder, M.R Jef Bojes, started this company. At that time, a handful of people had access to the internet, and the whole amazon was based on internet service. Still, Bejjos took the risk to start this company, and because of that risk currently, his name comes at no 4 in the list of the world's top 10 wealthiest people.