Difference between Public company and Private company

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Difference between Public company and Private company

Key Differences of Private and Public limited company & their Definations

Private Limited Company

A Private Limited company is a joint-stock company whose shares are held by private individuals which are privately held. by its Articles of Association (AOA)it:

  • Limits the transferability of Shares.
  • Limits the number of members to 200, other than one person copany (meaning that except for one person company the maximum number of members in a private limited company can be two hundred only )
  • Prohibits the entity to invite public for subscribing the securities offered. that is the entity can not invite public to subscribe for its shares or debentures public limited.

Public Limited Company

A public limited company is a joint-stock company that is listed on a recognized Stock Exchange and its securities are traded publicly. It is free to invite the public for subscribing shares and there is no restriction on the transfer of Shares. here you need to know that subsidy of a public company is deemed as a public company.

Difference between Private LTD Company and Public limited company

Private LTD CompanyPublic limited company
MeaningA company whose ownership lies in the hands of private individuals is called as private limited companyA Company whose ownership lies on the hands of general public is a Public company
MembersMinimum members = 2
Maximum members = 200
Minimum members = 7
Maximum members = No limit
DirectorsThere must be at least 2 directorsThere mus be at least 3 directors
Share TransferRestrictedFreely Transferable
Invitation to PublicProhibitedpermitted
ProspectusIssue of prospectus or statement in lieu of prospectus in not required.Issue of prospectus or statement in lieu of prospectus is compulsory
Statutory MeetingVoluntaryMandatory
Quorum2 members must be present in person to complete quorum at Annual General Meeting (AGM)5 members must be present in person to complete quorum at Annual General Meeting (AGM)
Start of BusinessOnce the company gets certificate of incorporationOnce the company gets certificate of incorporation and certifkate of commencement of businss
SuffixThe word ”Private Limited” is added as siffix, after the name of the companThe word ”Limited is added as a suffix, after the name of the company
Comparison between private and public company

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