Difference between a Private Limited Company and Public Limited Company in India

There are two types of the companies in India limited by shares viz. Private Limited company  and Public Limited Company.  A private company is the one which has a minimum paid up share capital of Rs. 100000 or such higher capital as prescribed by the Companies Act. Its Article of association mentions that the company restricts the right to transfer its shares; limits the number of its members from 2 to 50.

On the other hand, the public company means a company which is not a private company and has minimum of 7 shareholders/subscribers. It has to have a minimum paid-up share capital of Rs. 5 Lakh.

The differences between a Private Limited Company and Public Limited Company has been given  in the following table.

Distinction Private Company Public Company
Minimum Paid-up Capital 1 Lakh 5 Lakh
Minimum Number of Members 2 7
Maximum Number of Members 50 No restriction
Transerferability of shares Complete Restriction No Restriction
Issue of Prospectus Prohibited Free
Number of Director At least 2 At least 3
Commencement of Business Immediately after incorporation Only after commencement of business certificate is obtained
Statutory meeting No Obligation Obligatory
Quorum 2 members 5 members
Managerial remuneration No restriction Can not exceed more than 11% of Net Profits

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Comments

  • Ranjith
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    Hai how I can start a public ltd company in India