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Key differences between private limited and public limited company


The key differences between a Private Limited Company and a Public Limited company are tabled below.

Particulars Public Limited Company Private Limited Company
Minimum Number of share holders A Public limited company requires minimum 7 share- holders. A Private Limited Company requires minimum 2 share- holders.
Maximum Number of Share Holders There is no limit for maximum number of share- holders in a Public Limited Company. Maximum numbers of 200 share- holders are allowed in a Private Limited Company.
Minimum number of directors for Managing the affairs of the company. In case of Public limited company, minimum 3 directors are required for managing the affairs of the company In case of Private limited company, minimum 2 directors are required for managing the affairs of the company
Requirement of filing consent letter with ROC The Directors of Public limited company must file consent letter with ROC to act as Director of the company. No such requirement is needed for the Directors of private limited company.
Invitation to public to subscribe for share capital of the company The promoters of the Public limited company can issue prospectus and invite public subscription to raise capital from the general public. The promoters of private limited company are prohibited from inviting the public for the subscription of shares and debentures.
Transferability of company’s shares The shares of a public limited company are freely transferable. There are certain restrictions on transfer of shares of private limited companies.
Annual General Body Meeting The statutory general meeting is compulsory for public limited company The general meeting is not compulsory for private limited company
Certificate of commencement of business. The requirement of obtaining commencement of business certificate after incorporation of company has been removed in the Companies amendment act.2015. Under companies’ act 2013; private companies were also required to obtain commencement of business certificate after incorporation of the company. This clause has been removed in the Companies amendment act.2015.
Common Seal Earlier, under companies’ act 2013 a common seal was required for any attestations on behalf of the company. The above requirement of common seal is made optional in the Companies Amendment Act 2015. Earlier, under companies’ act 2013 a common seal was required for any attestations on behalf of the company. The above requirement of common seal is made optional in the Companies Amendment Act 2015.

 

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