Point of DistinctIon Public Company Private Company

1. Minimum number A public company must .A private company must
of members have at least seven have at least 2 members.
members.
2. Maximum number I No limit I Its members should not
of members exceed 50 in number (ex-
elusive of past and
present employees).
3. Minimum number I Three I Two
of directors
4. Public invitation for I It is free to invite the It cannot invite the public
capital public to buy its shares to buy its shares and de-
and debentures. dentures.
5. Commencement of I It cannot commence It can commence business
business business after incor- immediately after incor-
proration unless cer- proration.
certificate of commence-
meant of business is
obtained.
6. Prospectus I It must issue and file a Need not issue and file a
prospectus or state- prospectus or a statement
meant in lieu of pro- in lieu of prospectus.
conspectus before al1ot-
ing shares.
7. Allotment of shares I It cannot allot shares It can allot shares without
without receiving the raising the minimum
minimum subscription. subscription.
8. Statutory meeting I It 0 must hold a statutory It is not required to hold
meeting and must file the statutory meeting and
statutory report with the to file statutory report.
Registrar within six
months from the date of
obtaining the certificate
to commence business.
9. Transfer of shares I Its shares are freely I Its shares are not freely
transferable. transferable.


10. Minimum paid-up
capital
11. Share warrants

11. Rulc3 regarding
directors

12. Managerial
remuneration

13. End-words of the
name
14. Quorum


Five lakh at the time of incorporation.
It cannot issue share warrants.
Appointment, re-appointment etc. of directors suhject to Government approval.
Legal restrictions. Total managerial remuneration in a public company cannot exceed 11 % of the nct profits (Section 198).
Public Ltd. or Ltd.

If the articles of a company do not provide for a large quorum, 5 members personally present are quorum for a meeting.


One lakh at the time of incorporation.
It can issue share warrants.

No Government approval required for appointment, re-appointment etc. of directors.
No such restriction applies to a private company.

Private Ltd.

It is 2 in the case of II private company.


In addition to the above, a private company enjoys special privileges. A public company enjoys no such privileges.