Difference Between Public And Private Company | Comparison /Meaning /Benefits
Difference Between Public And Private Company
In the business glossary, there
is vast Difference Between The Public And Private Company. A public
company publicly owns and operates its business publicly and around seven
people need to set up Public Ltd Company.
While on the other hand, private
company is organized closely and requires at least two or more persons for its
formation. Let’s discuss the benefits of Pvt Ltd.
and Public Ltd Company through this article.
Difference Between Public And Private Company
What
is a Public Ltd. Company?
Public Limited Company is an association
of persons formed voluntarily which is started least
amount capital of INR 5,00,000. Also, you can say it is the mutual
stock company formed and listed under The Indian Companies Act.
In such types of company there is
no definite limit of members and also no restrictions of sharing transferability
of the shares. The company can invite the public for subscribing to shares or
debentures, and that is why the word 'public limited' is added to its name.
What
is the definition of Private Ltd. Company?
- A private limited company is a joint stock company, which is included under the Indian Companies Act, 2013 or any other previous Act.
- It is a union of voluntary people, whose minimum paid capital is Rs. 1,00,000 Except the existing employees and ex-employees.
- The maximum number of members is 200, who were members during their employment or remained a member after the expiry of their employment in the company.
Comparison
Between Public And Private Company
Basis For Comparison
|
Public Company
|
Private Company
|
Meaning
|
Pvt Ltd corporations are
owned and traded publicly
|
A Private company
are owned and
traded privately.
|
least amount of Members
|
7
|
2
|
Maximum members
|
Unlimited
|
200
|
Minimum Directors
|
3
|
2
|
Minimum paid up capital
|
INR 5,00,000
|
INR 1,00,000
|
Suffix
|
Limited
|
Private Limited
|
Statutory Meeting
|
Compulsory
|
Optional
|
Issue of prospectus / Statement in lieu of prospectus
|
Obligatory
|
Not required
|
Quorum at AGM
|
5 members must present in person.
|
2 members must
present in person.
|
Start of business
|
After receiving certificate of incorporation and certificate of
commencement of business.
|
After receiving
certificate of incorporation.
|
Transfer of shares
|
Free
|
Restricted
|
Public subscription
|
Allowed
|
Not allowed
|
Key Factors of Public and Private Ltd. Company
Don’t
you know ‘What is the difference between public and
private company?’ Here we have displayed some points through which your doubts
get removed.
4 Difference Between Public And Private Company
Recognized Stock
Public company refers to a
company that is listed on a recognized stock exchange and does business in public.
A Private Limited, The Company is one which is not listed on the stock exchange
and is organized privately by the members.
Transferability
Of Shares
It is one of the major Differences between Public Limited Company and Private
Limited Company. In private Limited Company, The transferability of
shares is completely restricted. While on the other hand, the shareholders of a
public company can freely transfer their shares.
Check
Out the Difference
|
Minimum
Subscription
Private Organizations can easily
allot their shares as they need to wait for the completion of minimum
subscription limit Whereas, Public Company can’t allot its shares before the completion
of minimum subscription of shares.
Issue of Prospectus
Private
Company doesn’t have authority to invite public for subscription of its shares,
so it can’t issue Prospects. While on the other hand, Public Company is free to
invite public for subscription of its shares, so it issues a Prospectus freely.
Benefits Of The Public And Private Company
Advantage
of Public Limited Company
- Raising capital through public issue of shares
- Widening the shareholder base and spreading risk
- Growth and expansion opportunities
- Prestigious profile and confidence
- Other finance opportunities
- Transferability of shares
Advantage
Of Private Limited Company
- Stability due to Limited Liability
- Long and continuity of Existence
- Minimum requirement of shareholders and members
- Capacity to sue and be sued
- Free & Easy transferability of shares
- Uninterrupted existence
- Separate Legal Entity
- Tax Advantages
After discussing the above facts
of organizations, Individuals can easily distinguish the Difference Between
Public And Private Company. Stay connected with our web portal www.privatejobshub.in
for getting more informative articles.
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