Question

Distinguish between Private Limited Company and Public Limited Company.

State any two differences between a Private Limited Company and a Public Limited Company.

How is a Public Limited Company different from a Private Limited Company?

Answer 1

Sr. No.	Points	Private Company	Public Company
1.	Meaning	A Private Limited Company is a company which by its articles, restricts the right to transfer share, limits the maximum number of members to 200 and prohibits the issue of prospectus.	A Public Company means a company, which is not a Private Company.
2.	Name of the company	Name of the company must end with the word ‘Private Limited’.	Name of the company must end with the word ‘Limited’.
3.	Number of the members	There are minimum 2 members. Maximum members are 200.	There are minimum 7 members. Maximum members are unlimited.
4.	Transfer of shares	Shares of the company are not freely transferable.	Shares of the company are freely transferable.
5.	Issues of prospectus	The company cannot issue prospectus. Statement in lieu of prospectus is issued.	The company has to issue prospectus compulsory.
6.	Number of directors	Minimum 2 Directors are needed in a Private Limited Company.	Minimum 3 Directors are needed in a Public Limited Company.
7.	Statutory of directors	A Private Limited Company need not hold a Statutory Meeting.	A Public Limited Company must hold a Statutory Meeting compulsorily.
8.	Capital	Minimum paid up capital is one lakh rupees.	Minimum paid up capital is five lakh rupees.
9.	Commencement of business	The business can be started after getting ‘Incorporation Certificate’.	The business can be started after getting ‘Commencement Certificate’.