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|