Diference between a Private Ltd. And Public Ltd.

Company
Base Private Ltd. Public Ltd.
1. Minimum Paid-up
Capital :
A company to be Incorporated
as a Private Company must
have a minimum paid-up
capital of Rs. 1,00,000
A Public Company must have
a minimum paid-up capital of
Rs. 5,00,000
2. Minimum number of
members :
inimum number of members
re!uired to form a private
company is "
A Public Company re!uires
atleast # members.
3. Maximum number of
members :
a$imum number of
members in a Private
Company is restricted to 50
%here is no restriction of
ma$imum number of members
in a Public Company.
4. ranserferabilit! of
s"ares :
%here is complete restriction
on the transferability of the
shares of a Private Company
throu&h its Articles of
Association
%here is no restriction on the
transferability of the shares of
a Public company
# .$ssue of Prospectus : A Private Company is
prohibited from invitin& the
public for subscription of its
shares, i.e. a Private
Company cannot issue
Prospectus
A Public Company is free to
invite public for subscription
i.e., a Public Company can
issue a Prospectus.
%. &umber of 'irectors : A Private Company may have
" directors to mana&e the
affairs of the company
A Public Company must have
atleast ' directors.
(. Consent of t"e directors : %here is no need to &ive the
consent by the directors of a
Private Company
%he (irectors of a Public
Company must have file )ith
the Re&istrar a consent to act
as (irector of the company.
). *ualification s"ares : %he (irectors of a Private
Company need not si&n an
underta*in& to ac!uire the
!ualification shares
%he (irectors of a Public
Company are re!uired to si&n
an underta*in& to ac!uire the
!ualification shares of the
public Company
+. Commencement of
Business :
A Private Company can
commence its business
immediately after its
incorporation
A Public Company cannot
start its business until a
Certificate to commencement
of business is issued to it.
1,. -"ares .arrants : A Private Company cannot
issue +hare ,arrants a&ainst
its fully paid shares
A Public Company can issue
+hare ,arrants a&ainst its
fully paid up shares.
11. /urt"er issue of s"ares : A Private Company need not A Public Company has to offer
offer the further issue of
shares to its e$istin& share
holders
the further issue of shares to
its e$istin& share holders as
ri&ht shares. -urther issue of
shares can only be offer to the
&eneral public )ith the
approval of the e$istin& share
holders in the &eneral meetin&
of the share holders only.
12. -tatutor! meetin0 : A Private Company has no
obli&ation to call the +tatutory
eetin& of the member,
Public Company must call its
statutory eetin& and file
+tatutory Report )ith the
Re&ister of Companies.
13. *uorum : %he !uorum in the case of a
Private Company is %,.
members present personally
In the case of a Public
Company -I/0 members
must be present personally to
constitute !uorum. 1o)ever,
the Articles of Association may
provide and number of
members more than the
re!uired under the Act.
14. Mana0erial
remuneration :
%hese restrictions do not
apply on a Private Company.
%otal mana&erial remuneration
in the case of a Public
Company cannot e$ceed 112
of the net profits, and in case
of inade!uate profits a
ma$imum of Rs. 3#,500 can
be paid
1#. -pecial privile0es: A Private Company en4oys
some special privile&es
Are not available to a Public
Company