Differentiate between public limited company and private limited company Public companies Ownership rights (Shares) are traded on the stock exchange. Anyone can have part ownership of the company i.e. BT, Microsoft. Their accounts need to be audited and are of public information Private company Ownership is usually just a few people. These are commonly smaller businesses. Their shares are not traded on the stock exchange. Their accounts dont need to be audited, and their financial statements are private Minimum Paid-up Capital Public limited company Minimum paid-up capital of Rs. 5,00,000 Private limited company Minimum paid-up capital of Rs. 1,00,000. Minimum number of members Public limited company Minimum number of members 7 Private limited company Minimum number of members 2 Maximum number of members Public limited company Unlimited number of members Private limited company Maximum number of members 50 Transerferability of shares Public limited company No restriction Private limited company Can not transfer Sales of shares Public limited company Public limited company can sell their shares Private limited company Private limited company cannot sell their shares Allotment of shares Public limited company Restriction on minimum Private limited company No restriction Issue of Prospectus Public limited company Public Company can issue a Prospectus Private limited company Private Company cannot issue Prospectus Number of Directors Public limited company Public Company must have at least 3 directors Private limited company Private Company may have 2 directors Company Name Public limited company Use title LIMITED Private limited company Use title PRIVATE LIMITED Consent of the directors Public limited company Consent was essential Private limited company No need to consent Qualification shares Public limited company Sign required for an undertaking Private limited company No need to sign an undertaking Commencement of Business Public limited company Cannot start its business until a Certificate to commencement of business is issued Private limited company Start business after its incorporation Promoters Public limited company 7 promoters are required Private limited company 2 promoters are required Further issue of shares Public limited company Has to offer further shares to general public Private limited company No need to issue further shares Statutory meeting Public limited company Compulsory to call statutory meeting Private limited company Not compulsory to call statutory meeting Quorum Public limited company Minimum 5 members required Private limited company Minimum 2 members required Tax Public limited company Relief available tax Private limited company No relief available for tax Managerial remuneration Public limited company Should not increase by 11 % Private limited company No restriction on private limited company Special privileges Public limited company No special privilege available Private limited company Special privilege available Dissolution Public limited company Dissolved by court Private limited company Can be easily dissolved by members
DIFFERENCE BETWEEN PRIVATE COMPANY AND PUBLIC COMPANY
PRESENTED BY: DEBASIS BEHERA REGD NO:10HM08
What is company? An association of persons who contribute money or moneys worth towards a businessLord Lindley. Voluntary association formed and organized to carry on a business in the legal name of the association. Company formed and registered under company act.
What is private company? Business firm in the private (non-public) sector of an economy, controlled and operated by private individuals (and not by civil servants or government employees). Used also as an alternative term for private limited company.
What is public company? A public company is a company that has permission to offer its registered securities (stock, bonds etc.) for sale to the general public, typically through a stock exchange or occasionally a company whose stock is traded over the counter (OTC) via market makers who use non- exchange quotation services. Used also as an alternative term for public limited company.
Difference between public and private company PRIVATE LTD. No. of members can be 2 to 50. Minimum paid up capital of Rs one lakh. Minimum number of directors present should be 2. Can accept deposit only from members, directors or their relatives.
PUBLIC LTD. No. of members can be 7 to unlimited. Minimum Paid up capital Rs five lakhs. Minimum number of directors present should be 3. Can accept public deposits. 5
DIFFERENCE BETWEEN PRIVATE AND PUBLIC COMPANY PRIVATE LTD Should contain words Private Limitedat the end of its name. Cannot invite public to subscribe for shares or debentures. Statement in lieu of prospectus not required even for first issue.
PUBLIC LTD Should contain word Limited at the end of its name. Can invite public to subscribe for shares or debentures. Statement in lieu of prospectus OR prospectus required. 6