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Comparison of Different Forms of Business Organization

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Topics

  • Private and Public Company
  • Comparison of Business Organization Types
Maharashtra State Board: Class 11

Private and Public Company

No. Aspect Private Company Public Company
1 Members 2–200 7 or more
2 Share Transfer Restricted Free
3 Capital No public fundraising Public fundraising allowed
4 Prospectus Not required Required
5 Directors Minimum 2 Minimum 3
6 Name Ends With "Private Limited" "Limited"
Maharashtra State Board: Class 11

Comparison of Business Organization Types

No. Aspect Sole Trader Partnership HUF Business Co-op Society Joint Stock Co.
1 Meaning Owned by one person Two or more partners Family-run ancestral business Voluntary group for member services Incorporated profit-driven with shares
2 Members 1 2–50 No limit Min. 10, no max Pvt: 2–200, Public: 7+, no max
3 Registration Not required Not compulsory (except in MH) Not required Compulsory Compulsory
4 Liability Unlimited Unlimited, joint Karta: unlimited; others: limited Limited to the unpaid share value Limited to the unpaid share value
5 Capital Limited Pooled by partners Ancestral property Moderate Huge capital
6 Secrecy High Shared among partners High Less secrecy Less secrecy
7 Management Sole manager All partners Karta & co-parceners Managing committee Board of directors
8 Stability Unstable Unstable Stable with family continuity Stable Very stable
9 Govt. Control Minimal Minimal Limited Strict Strict
10 Law Applicable No specific act Partnership Act, 1932 Hindu Law Co-op Act, 1912 + State Act Companies Act, 2013
11 Formation Easy Few formalities Simple Cheaper but slow Costly and complex
12 Voting Rights Not applicable Not applicable Not applicable One member = one vote One share = one vote

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