Difference between Private Limited and Public Limited Company -
1. A Private Limited Company is a form of Joint Stock Company which has restrictions on the transfer of shares.
Public Limited Company is a joint-stock company which is not a private company (private limited company). The public limited company has been defined as a joint-stock company which is not private limited.
2. In case of a private limited company, the shares are not freely transferable.
In case of a public limited company, the shares are freely transferable. Shares can be bought or sold freely on stock exchanges.
3. A private limited company requires a minimum of two directors whereas a public limited company requires a minimum of 3 directors.
4. In case of a private limited company, the minimum number of members required is two and the maximum number of the owners or the members that a private limited company can have is 50.
However, in case of a public limited company, the minimum number of members required is seven and there is no upper limit on the number of members that a public limited can have.
5. A private limited company cannot invite the general public to subscribe to its shares and debentures whereas the public limited company can invite the public. They can invite the public to invest in the shares and debentures of the company.
A public limited company can openly advertise and invite the general public to subscribe to its shares or debentures. A private limited company cannot do any such kind of advertisement through which it can invite the general public to invest in the shares of the private limited company or the debentures of the private limited company.
6. In the case of a private limited company, it is compulsory for the company to use the words "private limited" after the name of the company.
In case of a public limited company, it is compulsory to use the word "limited" after the name of the company.
7. To start a private limited company, you need to have a minimum paid-up capital of Rs.1,00,000/-. In other words, the owners should invest a minimum of one lakh to start a private limited company. The one lakh should be invested from the pocket of the owners or the shareholders.
In case of a public limited company, the minimum paid-up capital required is rupees five lakhs.
1. A Private Limited Company is a form of Joint Stock Company which has restrictions on the transfer of shares.
Public Limited Company is a joint-stock company which is not a private company (private limited company). The public limited company has been defined as a joint-stock company which is not private limited.
2. In case of a private limited company, the shares are not freely transferable.
In case of a public limited company, the shares are freely transferable. Shares can be bought or sold freely on stock exchanges.
3. A private limited company requires a minimum of two directors whereas a public limited company requires a minimum of 3 directors.
4. In case of a private limited company, the minimum number of members required is two and the maximum number of the owners or the members that a private limited company can have is 50.
However, in case of a public limited company, the minimum number of members required is seven and there is no upper limit on the number of members that a public limited can have.
5. A private limited company cannot invite the general public to subscribe to its shares and debentures whereas the public limited company can invite the public. They can invite the public to invest in the shares and debentures of the company.
A public limited company can openly advertise and invite the general public to subscribe to its shares or debentures. A private limited company cannot do any such kind of advertisement through which it can invite the general public to invest in the shares of the private limited company or the debentures of the private limited company.
6. In the case of a private limited company, it is compulsory for the company to use the words "private limited" after the name of the company.
In case of a public limited company, it is compulsory to use the word "limited" after the name of the company.
7. To start a private limited company, you need to have a minimum paid-up capital of Rs.1,00,000/-. In other words, the owners should invest a minimum of one lakh to start a private limited company. The one lakh should be invested from the pocket of the owners or the shareholders.
In case of a public limited company, the minimum paid-up capital required is rupees five lakhs.
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