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.
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.
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.
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