This document discusses the differences between private and public companies under business law. It notes that private companies are restricted in their ability to offer shares to the public, must have a minimum of 1 member and maximum of 50 members, have less stringent financial disclosure requirements, and more flexibility in share transfers and management compared to public companies. Public companies on the other hand can offer shares to the general public through a stock exchange listing, must have a minimum of 3 members, are subject to more regulatory requirements around financial disclosure, share transfers, and management structures. The key differences between the two center around ownership, capital raising activities, and transparency requirements.

1. BUSINESS LAW
SUBMETTED TO:
PROF UMAR ZAKA

2. SUBMITTED BY:

3. Company
• The company is an association of people who
want to do certain business activities with
having a legal existence. There are multiple
types under which a company can be formed
under company laws like Statutory
Companies, Single Person Company,
Companies Limited by shares, a company
limited by guarantee, Public Limited
Company, Private Limited Company.
• Company formation type is completely based
on the liability of members, the number of
members, incorporation mode. Among these
types, Private companies and Public
companies are the most popular.

4. Company types
• Company formation type is completely based on the liability of
members, the number of members, incorporation mode. Among
these types, Private companies and Public companies are the most
popular.

5. Difference between Private and public company

6. What is private and public??
Private
• A private company cannot offer its share to
the general public as it is restricted, in a
private company the shares are privately held
by the members or investors.
• The private company the suffix after its name
Private Limited (PVT LTD),
• The main advantage of a private company is
they don’t need to disclose their financials to
the general public.
Public
• A public company under the companies act
2013 means a company that is listed on a
stock exchange and can sell its general
securities to the public.
• Publicly listed company means their
shareholders can sell securities freely on a
stock exchange. Securities to the general
public.
• A public company needs to disclose its
annual report to all the stakeholders.

7. Meaning
Private
• Private company is owen anf
traded privately
• Public company is owned and
traded publicity on the stock
exchange
Public
Public company is owned and
traded publicity on the stock
exchange

8. As the capital
private
• As to Capital
• Raising the capital in private
company is not that easy as
neither shares nor the
debentures are to be issued
here.
public
• Capital of public company can be
raised by issuance of more
shares or debentures.

9. As the transfer of share
private
• Here, in a private company the
transfer of case has been strictly
checked
public
• In public company a share can
be easily transferred.

10. As the management
private
• A private company is also
governed by directors but not
elected as in public company.
public
• A company is to be managed by
the director chosen for three
years individually and the board
of directors collectively. Such
board comprises of 7 members.

11. As the membership
private
• In private company the
minimum number of members
should be 1 in accordance with
the amendments made in 2002
which introduced Single
Member Company’s concept in
Pakistan. The maximum
members should not exceed 50
Public
• Previously the minimum number
of members for incorporating a
public company was 7 which
were later reduced to 3 in
accordance with amendments
made in 2002.

12. As to managing accounts
private
• Private company may manage its
accounts but is not bound to
book with the registrar
public
• Public company is bound to
manage its accounts and book it
with the registrar.

13. As the statutory meeting
Private
• Private company does not call
any such meeting.
public
• Public Company does hold the
statutory meeting within a
definite period after its
incorporation.

14. As to publication of balance sheet
private
• Private company needs no step
to take in this regard.
public
• Balance sheet is to be published
by public company after every
three months.

15. As to commencement of business
private
• Private company may
commence its business without
any such certificate.
public
• Business is commenced by a
public company after it receives
the certificate of
commencement.

16. As to allotment of share
private
• Private company may allot its
shares soon after its
incorporation.
public
• Public company does not allot its
shares soon after incorporation.

17. As to issuance of prospectus or statement
private
• Private company neither
publishes prospectus not issues
statement.
public
• Public company is bound to
publish any of the two.

18. As to director
private
• Private company shall not have
less than two directors in case of
‘Multiple Member Company’
providing an exception to ‘Single
Member Company.
public
• Public company shall not have
less than three directors.

19. As to issurance of debentures
private
• Private company does not issue
debentures
public
• Public company can issue
debentures.

20. As to dissolution
private
• Private company has a separate
procedure for its dissolution.
Pub;ic
• Public company is dissolved as
directed in the ordinance.