Differences between Private and Public Company¶
Basis for Comparison¶
| Criteria | Private Limited Company | Public Limited Company |
|---|---|---|
| Meaning | Not listed on a stock exchange, shares held privately by members. | Listed on a recognized stock exchange, shares traded openly by the public. |
| Minimum number of members | 2 (except in the case of a one-person company). | 7 |
| Maximum number of members | 200 (except in the case of a one-person company). | Unlimited |
| Minimum number of directors | 2 | 3 |
| Articles of Association | Must frame its own articles of association. | Can frame its own articles of association or adopt Table F. |
| Transfer of Shares | Shares not freely transferable, restrictions in Articles of Association. | Shares freely transferable, traded openly on a stock exchange. |
| Public Subscription | Issue of shares or debentures to the public is prohibited. | Can invite the public to subscribe to its shares or debentures. |
| Issue of Prospectus | Prohibited from issuing a prospectus. | Can issue a prospectus or opt for private placement. |
| Minimum Amount of Allotment | Can allot shares without obtaining minimum subscription. | Cannot allot shares unless the minimum subscription is obtained. |
| Commencement of Business | Can start a business after receiving a certificate of incorporation. | Requires a certificate of commencement of business after incorporation. |
| Appointment of Director | Two or more directors can be appointed by a single resolution. | One director can be appointed by a single resolution. |
| Filing of Consent to Act | Directors need not file their consent to act as a director. | Directors must file their consent to act within 30 days of appointment. |
| Retirement of Directors by Rotation | Directors not required to retire by rotation; can be permanent. | 2/3rd of total directors must retire by rotation. |
| Exemptions | Enjoys many privileges and exemptions. | No such privileges and exemptions. |
| Place of Holding AGM | AGM can be held anywhere. | AGM held at the registered office or any other place where the registered office is situated. |
| Statutory Meeting | Optional | Compulsory |
| Quorum | 2 members constitute a quorum, irrespective of the number of members. | 5 members for up to 1000 members, 15 members for 1000 to 5000 members, 30 members for more than 5000 members. |
Ask Hive Chat
Hive Chat
Hi, I'm Hive Chat, an AI assistant created by CollegeHive.
How can I help you today?
How can I help you today?
🎶