Question

Differentiate between public and private form of joint stock company on the basis of:

1. Transferability of shares
2. Public subscription of shares
3. Minimum paid-up capital

Answer 1

1. Private limited company restricts any transfer of shares but it is not restricted in the case of a public limited company.
2. Private limited company does not invite the public to subscribe for its shares, debentures and public deposits, unlike public limited companies.
3. Private limited company has a minimum paid-up capital of two lakh rupees, whereas it is five lakh rupees for a public limited company.