Companies limited by shares:
It is an established practice that commercial, trading and industrial companies are incorporated as limited by shares. The features of such companies are that there will be an authorised share capital of a certain amount which is divided into shares of a definite amount called the par value or nominal value of shares.
Company limited by guarantee and having share capital:
One will find companies limited by guarantee in the fields of associations of traders formed for trade protection and collection of relevant data and information or of associations formed for entertainment and promotion of cultural activities which are established for rendering service to members and not for earning profit. The memorandum of association of such a company shall state that each member undertakes to contribute, in the event of winding up of the company.
Companies limited by guarantee without share capital:
Companies limited by guarantee and having no share capital are exactly similar in nature to the guarantee companies except that there will be no share capital. The members will be liable, in the circumstance to contribute an amount not exceeding the sum specified.
It’s so uncommon and rare. Every member in such a company is jointly and severally liable for all the debts and liabilities of the company. Accordingly, the liability of a member of such a company is analogous to that of the individual partners in a firm or partnership. Unlimited companies may have share capital although, like some guarantee companies, they are not bound to do so.