The public company refers to a company that is listed on a recognized
stock exchange and traded publicly. A Private Ltd. the company is one that is
not listed on a stock exchange and is held privately by the members.
There must be at least seven members to start a public
company. As against this, the private company can be started with minimum two
members.
There is no ceiling on the maximum number of members in a
public company. Conversely, a private company can have a maximum of 200
members, subject to certain conditions.
A public company should have at least three directors
whereas the Private Ltd. Company can have a minimum of 2 directors.
It is compulsory to call a statutory general meeting of
members, in the case of a public company, whereas there is no such compulsion
in the case of a private company.
In a Public Ltd. Company, there must be at least five
members, personally present at the Annual General Meeting (AGM) for
constituting the requisite least. On the other hand, in the case of a Private
Ltd. Company, that number is 2.
The issue of prospectus/statement instead of the prospectus
is mandatory in case of a public company, but this is not the case with the
private company.
To start a business, the public company needs a certificate
of commencement of business after it is incorporated. In contrast, a private
company can start its business just after receiving a certificate of
incorporation.
The transfer ability of shares of a Pvt. Ltd. company is
completely restricted. On the contrary, the shareholders of a public company
can freely transfer their shares.
A public company can invite the general public for
subscribing shares of the company. As opposed, a private company has no right
to invite public for subscription.
