Difference between Public & Private Companies, Pvt Ltd Vs Public Ltd

Difference between Public & Private Companies: Check the Difference in between a Public Company and a Private Business. Unlike proprietorship where the entity is the very same as the promoter, in the case of a company, the promoters and the company are treated to be various individuals.

Difference Between Public Private Companies.jpg

Companies limited by shares are divided into two broad types in India– Public Ltd. Companies & Private Ltd. Companies. Just like the name suggests, it is really easy to distinguish between the 2 of them. Personal companies have certain constraints, while public business are a bit more lenient. The minimum paid up share capital of a personal restricted company need to be Rs. 100,000 The minimum number of members is 2 in the case of a Personal Ltd. business. The optimum variety of members is 50 people in a Private Ltd. Business.

In the case of a Public Ltd. Company, the minimum no. Unlike private business which have a limitation to their no.

Also, it is a compulsory requirement for all Personal Limited companies, to have the post scrip of ‘Pvt. Ltd.’ suffixed to their names.

Difference between Public & Private Companies

Definition of Private Ltd. Co.: A company incorporated under The Indian Companies Act, 2013 or any other previous act, having a minimum paid up capital of Rs. These members are restricted to move their shares and likewise, such business can not provide a public invite for membership of shares and their debentures.

Definition of Public Ltd. Co: A business integrated under The Indian Business Act, 2013 or any other previous act, having a minimum paid up capital of Rs. These members are free to transfer their shares and likewise, such business can provide a public invitation for membership of shares and their debentures.

The following table will assist to much better comprehend the distinctions between the 2:

Feature PVT. Company Public Limited Business
Minimum Members There need to be at least 2 members. There needs to be at least 7 members.
Optimum Members There can be a maximum of 50 members. There is no limitation so as to the number of members.
Minimum Directors There should be minimum 2 Directors. There must be minimum 3 Directors.
Suffix Pvt. Ltd. Ltd.
Statutory Fulfilling Voluntary Necessary
Public Membership Not Enabled Allowed
Share Transferability Restricted. Not freely transferable. Freely Transferable.
Quorum Requirements 2 members personally present. 5 members present personally.
Start of Service Operations On receipt of Certificate of Incorporation. On Receipt of Certificate of Start of Company.
Minimum Paid Up Capital Rs. 1,00,000/- Rs. 5,00,000/-

The above points revealed us how the 2 types of business are various from each other. In basic, the legal requirements of a Private Business are lower as compared to those of a Public Business. A Public Business being owned and traded openly deals with a large no. of legal compliances as compared to a Private Company since Private Business are owned and traded independently.

Recommended Articles

  • Procedure for Transfer of shares
  • What is listing, its Value and Benefits of listing
  • Category of Directors under Business Act 2013
  • Elimination of Name of the Company From ROC
  • What is Nidhi Company and points to be considered
  • Devaluation Rate Chart Based On Companies Act 2013– Updated
  • Meanings of Companies under Companies Act, 2013
  • Incorporation of Pvt. Ltd. Company according to Companies Act 2013
  • How to convert Personal Restricted company into OPC??
  • Independent directors in Indian business

1 photos of the "Difference between Public & Private Companies, Pvt Ltd Vs Public Ltd"

Difference Between Public Private Companies.jpg