Difference between limited and private limited
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
31 July 2012
PL EXPLAIN IN DETAIL ABOUT DIFFERENCE BETWEEN PRIVATE LIMITED COMPANY AND LIMITED COMPANY
01 August 2012
The distinction between a public company and a private company are explained in the following manner:
1. Minimum number of members
The minimum number of person required to form a public company is seven, whereas in a private company their number is only two.
2. Maximum number of members
There is no limit on the maximum number of member of a public company, but a private company cannot have more than fifty members excluding past and present employees.
3. Commencement of Business
A private company can commence its business as soon as it is incorporated. But a public company shall not commence its business immediately unless it has been granted the certificate of commencement of business.
4. Invitation to public
A public company by issuing a prospectus may invite public to subscribe to its shares whereas a private company cannot extend such invitation to the public.
5. Transferability of shares
There is no restriction on the transfer of share In the case of public company whereas a private company by its articles must restrict the right of members to transfer the share.
6. Number of Directors
A public company must have at least three directors whereas a private company may have two directors.
7. Statutory Meeting
A public company must hold a statutory meeting and file with the register a statutory report. But in a private company there are no such obligations.
8. Restrictions on the appointment of Directors
A director of a public company shall file with the register a consent to act as such. He shall sign the memorandum and enter into a contact for qualification shares. He cannot vote or take part in the discussion on a contract in which he is interested. Two-thirds of the directors of a public company must retire by rotation. These restrictions do not apply to a private company.
9. Managerial Remuneration
Total managerial remuneration in the case of public company cannot exceed 11% of net profits, but in the case of inadequacy of profit a minimum of Rs. 50, 000 can be paid. These restrictions do not apply to a private company.
10. Further Issue of Capital
A public company proposing further issue of shares must offer them to the existing members. A private company is free to allot new issue to outsiders.
11. Name
A private company has to use words ‘private limited’ at the end of its name. But a public company has to use only the word ‘Limited’ at the end of its name.
1. Minimum number of members
The minimum number of person required to form a public company is seven, whereas in a private company their number is only two.
2. Maximum number of members
There is no limit on the maximum number of member of a public company, but a private company cannot have more than fifty members excluding past and present employees.
3. Commencement of Business
A private company can commence its business as soon as it is incorporated. But a public company shall not commence its business immediately unless it has been granted the certificate of commencement of business.
4. Invitation to public
A public company by issuing a prospectus may invite public to subscribe to its shares whereas a private company cannot extend such invitation to the public.
5. Transferability of shares
There is no restriction on the transfer of share In the case of public company whereas a private company by its articles must restrict the right of members to transfer the share.
6. Number of Directors
A public company must have at least three directors whereas a private company may have two directors.
7. Statutory Meeting
A public company must hold a statutory meeting and file with the register a statutory report. But in a private company there are no such obligations.
8. Restrictions on the appointment of Directors
A director of a public company shall file with the register a consent to act as such. He shall sign the memorandum and enter into a contact for qualification shares. He cannot vote or take part in the discussion on a contract in which he is interested. Two-thirds of the directors of a public company must retire by rotation. These restrictions do not apply to a private company.
9. Managerial Remuneration
Total managerial remuneration in the case of public company cannot exceed 11% of net profits, but in the case of inadequacy of profit a minimum of Rs. 50, 000 can be paid. These restrictions do not apply to a private company.
10. Further Issue of Capital
A public company proposing further issue of shares must offer them to the existing members. A private company is free to allot new issue to outsiders.
11. Name
A private company has to use words ‘private limited’ at the end of its name. But a public company has to use only the word ‘Limited’ at the end of its name.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GSTR-1A How to update Invoice
- Excess salary payment.
- Capital gain from sale of house property
- Stamp Paper for partnership firm change new income tax 2025
- TDS on Purchase of Immovable Property by NRI from NRI
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- Value of property in capital gain
- Annual return in Gst
- When TDS on GST applied
- Before GSTAT- APL-02 Vs APL-04
- TDS APPLICABILITY......
- Copyright software
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
