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Difference between shares of Public & Private limited companies? and Listed & Unlisted companies? Give more details (Shares & Stock)

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This query is : Resolved


( Author )
13 September 2007

Please give more details regarding the following:

Difference between shares of Public & Private limited companies? and Listed & Unlisted companies? of the same. How to categorize them? How to transfer shares in either cases? Provide details with examples? Also provide websites, if any.


R.V.RAO

( Expert )
14 September 2007

THE WORD PUBLIC ITSELF SHOWS EXPOSURE TO PUBLIC. IN OTHER WORDS SHARES ARE OFFERED TO PUBLIC.
A PRIVATE LIMITED COMPANY BY ITS VERY NATURE IS RESTRICTED TO TRANSFER SHARES ONLY AMONG ITS MEMBERS. NOT TO OUTSIDERS.
SECTION 3 SUBSECTION 1 ( clause 3)of companies act deals with this DEFINITION.
PRAVTE LIMITED COMPANY'S TOTAL NUMBER OF MEMBERS IS MINIMUM TWO AND MAXIMUM 50.
FOR A PUBLIC LTD. COMPANY MINIMUM NUMBER OF MEMBERS OR SHARE HLOLDERS IS 7 AND NO MAX.
A PRIVATE LTD. CO. CANNOT ISSUE PROSPECTUS TO PUBLIC TO SUBSCRIBE TO ITS SHARES.
A PUBLIC LTD. CO. CAN DO THAT.
BY LAW A PVT. LTD. COMPANY ENJOYS MANY PRIVILEGES AND EXEMPTIONS IN AREAS WHERE A PUBLIC LTD. CO IS BOUND BY SEVERAL OBLIGATIONS , RESTRICTIONS AND LEGAL COMPLIANCES.
BUT IT IS THESE LEGAL COMPLIANCES WHICH MAKES A LENDER VERY COMFORTABLE TO LEND MONEY TO A PUBLIC LTD, CO. BUT NOT A PVT. LTD. CO.
A LISTED COMPANY IS ONE WHICH NOT ONLY ISSUES SHARES TO PUBLIC THROUGH PROSPECTUS BUT ALSO GETS THESE SHARES LISTED ON ONE OR MORE STOCK EXCHANGES AND IS BOUND NOT ONLY BY THE LISTING AGREEMENT IT SIGNS WITH STOCK EXCHANGES BUT ALSO BOUND BY SEBI REGULATIONS FOR LISTED COMPANIES.
THIS IS THE PRICE LISTED COMPANIES PAY FOR ENJOYING PUBLIC MONEY.
LISTING OF SHARES ALLOW INVESTORS TO ENJOY TRADING IN THOSE SHARES AND LOSE OR GAIN IN TRADING.
AN UNLISTED COMPANY'S SHARES NOT BEING LISTED ON A STOCK EXCHANGE CANNOT BE PUBLICLY TRADED.
BUT THERE ARE NUMEROUS INSTANCES WHEN EVEN AN UNLISTED COMPANY'S SHARES ENJOY A GREY MARKET PREMIUM OR DISCOUNT AS PER THE COMPANY'S MARKET PROFILE/PRODUCTS AND PROFITS.
AS FOR TRANSFER OF SHARES, THERE IS EITHER A PHYSICAL OR ELECTRONIC TRANSFER( DEMAT).ONE CAN TRANSFER SHARES EVEN IN CASE OF UNLISTED OR PRIVATE COMPANY BY USING SHARE TRANSFER FORM AND GETTING THE TRANSFER REGISTRED BY THE COMPANY IF THE COMPANY IS HAVING AND IN HOUSE SHARE REGISTRY DIVISION OR BY THE COMPANY'S RTA-REGISTRAR AND SHARE TRANSFER AGENT .
RTAs ARE AGAIN GOVERNED BY SEBI REGULATIONS.
FOR ANY SPECIFIC PROBLEM OR FOR MORE DETAILS YOU MAY REFER WEBSITES OF www.bseindia.com, www.nseindia.com ,or websites of any RTA like karvy consultants and for their EXACT websites names,pl. use google search bar by opening www.google.com .
WWW. COMPANYLAWINFO.COM IS ALSO OF USE.
C.A.R.V.RAO


SUBRAMANIA SARMA G

( Expert )
14 September 2007

Dear Ganesh

A bit of advise. Pl go through the querry posted and correct the errors like spelling and ocntent errors before sending. It makes a lot of difference if the querry is posted without errors and spelling mistakes


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