Page 27 - Business_Studies_F5

Student's Book Form Five

Classification of companies based on Other classifications of companies
control or holding The following are other types of companies:
The classification of companies based on Government companies: These are those in
control or holding is as follows: which more than 50 percent of share capital

Holding and subsidiary or group is held by either the central government,
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companies: In some cases, the company’s or by one or more state governments, or
shares might be held fully or partly by jointly by the central government and one
another company. The company owning or more state governments.
these shares becomes the holding or parent Foreign companies: These are those that are
company. Likewise, the company whose incorporated or registered under the laws
shares are owned by the parent company of one state but perform their businesses
becomes a subsidiary company. Holding outside their domestic country.
companies may exercise control over Charitable companies under certain specific
their subsidiaries. Thus, when company sections: Certain companies have charitable
“A” holds more than 50 per cent shares purposes as their objectives. Charitable
of company B, then company “A” is the companies focus on the promotion of arts,
parent or holding company and company science, culture, religion, education, sports,
“B” is a subsidiary company. trade, and commerce as their objectives.
These companies are not for profit making;
Associate or affiliate companies: These hence they do not pay any dividends to
are those in which other companies have their members.
significant influence. This implies control
of at least 20 percent and not more than 50 Dormant companies: These are companies
percent of total share capital of a company. that exist but are inactive in a given period.
These companies are generally formed for
Classification of companies in terms of future projects. They do not have significant
access to capital accounting transactions and do not have to
The classification of companies in terms carry out all compliance with regulatory
authorities.
of access to capital is as follows:

Listed companies: These companies have Activity 2.1
their securities listed on stock exchange
markets. This means persons can freely (a) Search details of companies
buy and sell their shares. In such markets, operating internationally, then:
public companies are commonly listed. (b) Identify at least 10 of those
companies operating in Tanzania.
Unlisted companies: These companies, do (c) Categorise the companies
not list their securities on stock exchange identified in part (b) based on
markets. Private companies can fall under the types of companies. Provide
this category. reasons for your answers

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