Differences between Private Company and Public Company
Bases of difference |
Private Ltd Company |
Public Ltd Company |
Number of members |
A private company needs at least one member for its formation; the maximum number can be fifty (some state 100). |
A public company needs at least seven members for its formation; the maximum number is not limited. |
Invitation for capital |
It cannot invite the public to buy its shares. |
It is free to invite the public to buy its shares and debentures. |
Commencement of business |
It can commence its business immediately after its incorporation. |
It can commence its business after obtaining the certificate of the commencement of business. |
Issue of prospectus |
It does not need to issue a prospectus. |
It must issue a prospectus. |
Statutory meetings |
It does not need to hold statutory meetings and file a statutory report. |
It must hold a statutory meeting and file a statutory report. |
Transfer of shares |
The transfer of its shares is not allowed and its ownership cannot be transferred. |
The transfer of its shares is allowed and its ownership can be transferred. |
Use of word ‘Limited’ |
It must use the word private limited at the end of its name. |
It uses the word limited at the end of its name. |
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