private vs public company

1. Subject: Law of business organisation
Standard: LL.B 6th semester
Topic: Public Company vs Private Company
MUNIR HUSSAIN KTK
Lecturer
UNIVERSITY LAW COLLEGE
QUETTA
www.facebook.com/pages/Corridor-to-Commercial-Law
Objectives
To Learn
1. Point of differences between
Private Company and public
Companies.
Definition of a private company.
A Company which by its Article
i. Restrict the Right to Transfer its Share
ii. Limit the Number of its Member to Fifty
iii. Prohibits any invitation to the Public
 Definition of a public company. A Company which is not a Private Company.
Means ….
Share are Transferable
Member are Unlimited
Can Invite the Public
On The Basis Of
a. Signatories to Memorandum(02)
b. Number of Director (02)
c. First Director (not mandatory )
d. Number of Member
Minimum 01 for SMC / 02 Maximum 50
a. (Excluding the Employee)
e. Issuance of Prospectus (cannot issue )
f. Allotment of Share (just after registration)
g. Commencement of Business(just after
registration)
h. Statutory Meeting(not mandatory )
i. Qualified Auditor (relaxed)
j. Sending of Account (annually relaxed)
k. Inspection of Documents(not a public )
l. Annual Balance Sheet (relaxed )
m. Transferability of Share (No)
n. Framing of Articles (yes)
o. Borrowing (privately )
p. Use of the Word private (mandatory)
q. Stock exchange (NO)
On The Basis Of
a. Signatories to Memorandum (03)
b. Number of Director (03)
c. First Director (At the time of formation)
d. Number of Member
Minimum 03 Maximum unlimited
(Excluding the Employee)
e. Issuance of Prospectus (can issue)
f. Allotment of Share (after minimum
subscription)
g. Commencement of Business (after
business certificate)
h. Statutory Meeting (mandatory)
i. Qualified Auditor (mandatory. CA)
j. Sending of Account (Annually mandatory)
k. Inspection of Documents(anyone .like an
open book)
l. Annual Balance Sheet(mandatory)
m. Transferability of Share (yes)
n. Framing of Articles (may adopt table A)
o. Borrowing (after business certificate)
p. Use if the word public (NO)
q. Stock exchange (yes)
Private company Public Company
There is no difference in the legal status in eyes of law both are legal personthe
mere difference is in the formation and relaxations given to private companies
which is not given to public companies.After registration both clothes with legal
entity.