Difference between Public Limited and Private Limited Company

Q. Distinguish between Public Company and Private Company. [2016 - 4 marks,  2019 - 10 marks]

Differences between Public Limited Company and Private Limited Company

1. Number of Directors: For a Private Limited Company the minimum number of directors are 2 whereas for a Public Limited Company the minimum number directors are 3.

2. Number of Members: Private limited company may have minimum 2 and maximum 50 members. Public limited company minimum 7 members. There is no limit to the maximum number of members.

3. Transferability of Shares: Shares of private limited company are non transferable. There is no restriction in transfer of share of public limited company.

4. Issue of Shares: Public limited company can raise capital through public issue of shares and debentures. Private limited company can not do so.

5. Naming Convention: It is mandatory to add Private to the name of a private limited company. In case of public limited company, it is mandatory to add the word Public limited in the name,

6. Capital: For public limited company minimum paid up capital is 5 lakh rupees. For private limited company it is one lakh rupees.