Sunday, May 11, 2014

Difference between Public Limited Company and Private Limited Company

Basis of Difference
Private Company
Public Company
a)        Number of persons

Minimum number of members is 2 and the maximum 50, excluding its present or past employee members.
Minimum number of members is 7 and there is no limit as to maximum numbers.
b)        Issue of Prospectus
Prospectus need not be issued.
Prospectus or a Statement in lieu of Prospectus must be issued for inviting public to subscribe to its shares or debentures.
c)        Transfer of Shares
Transfer of shares is generally restricted by the articles of association of a private limited company.
The shares of a public company are freely transferable.
d)        Paid-up Capital
Minimum paid-up Capital should be
Rs. 1, 00,000.
Minimum paid-up Capital should be     Rs. 5, 00,000.
e)        Number of Directors
A Private Company must have at least two directors.
A Public Company must have at least three directors.
f)         Commencement of Business
A Private Company can commence its business after getting the certificate of incorporation.
In addition to the certificate of incorporation, certificate for commenc-ement must be obtained.
g)        Quorum
The quorum for a meeting is two.
The quorum for a meeting is five.
h)        Name
The word ‘Private Limited’ must be used as a part of the name.
The word ‘Limited’ must be used as a part of the name.
i)          Managerial Remuneration
There is no restriction on managerial remuneration.
Managerial remuneration cannot exceed 11% of the net profits.