difference between public company and private company

1. COMPANY LAW
PRIVATE COMPANY AND
PUBLIC COMPANY
RUCHI SHETH
80

2. PRIVATE COMPANY
According to Section 2(68) of
Companies Act, 2013, “Private
company” means
* A company
having minimum
paid up share
capital of 1
lakh rupees or
as may be
prescribed by
government.
* Restricts
the right of
members to
transfer its
shares , if any
* Prohibits any
invitation to
the general
public to
subscribe for
its shares or
debentures

3. PUBLIC COMPANY
According to Section 2(71) of Companies
Act, 2013, “Public Company” means :-
* Is not a
private
company
* Has a minimum
paid-up share capital
of 5 lakh rupees or
such higher paid-up
capital as may be
prescribed by
government

4. DIFFERENCE BETWEEN PRIVATE
COMPANY AND PUBLIC COMPANY
PRIVATE COMPANY
Must have at least
2 members
Maximum 200
number of
members
PUBLIC COMPANY
Must have at least
7 members
Maximum unlimited
number of
members

5. • Can allot shares immediately
after incorporation
• Can commence business as
soon as it is incorporated
• Not required to hold the
statutory meeting & to file
statutory report
• Must have at least 2 directors
• The directors of private
company did not file their
written consent with the
registrar to act as directors
• Cannot allot shares unless
the minimum subscription is
reached
• Cannot commence business
soon after incorporation. It
has to wait until it obtains a
certificate for commencement
of business
• Must hold statutory meeting
and must file statutory report
• Must have at least 3 directors
• The directors of public
company must file their
written consent with the
registrar to act as directors