Differentiate between public limited company and private limited company

Differentiate between public limited company and private limited company

Public companies – Ownership rights (Shares) are traded on the stock exchange. Anyone can have part ownership of the company i.e. BT, Microsoft. Their accounts need to be audited and are of public information

Private company – Ownership is usually just a few people. These are commonly smaller businesses. Their shares are not traded on the stock exchange. Their accounts don’t need to be audited, and their financial statements are private

Minimum Paid-up Capital

                Public limited company

                                Minimum paid-up capital of Rs. 5,00,000

                Private limited company

                                Minimum paid-up capital of Rs. 1,00,000.

Minimum number of members

                Public limited company

                                Minimum number of members 7

                Private limited company

                                Minimum number of members 2

Maximum number of members

                Public limited company

                                Unlimited number of members

                Private limited company

                                Maximum number of members 50

Transerferability of shares

                Public limited company

                                No restriction

                Private limited company

                                Can not transfer

Sales of shares

                Public limited company

                                Public limited company can sell their shares

                Private limited company

                                Private limited company cannot sell their shares

Allotment of shares

                Public limited company

                                Restriction on minimum

                Private limited company

                                No restriction

Issue of Prospectus

                Public limited company

                                Public Company can issue a Prospectus

                Private limited company

                                Private Company cannot issue Prospectus

Number of Directors

                Public limited company

                                Public Company must have at least 3 directors

                Private limited company

                                Private Company may have 2 directors

Company Name

                Public limited company

                                Use title LIMITED

                Private limited company

                                Use title PRIVATE LIMITED

Consent of the directors

                Public limited company

                                Consent was essential

                Private limited company

                                No need to consent

Qualification shares

                Public limited company

                                Sign required for an undertaking

                Private limited company

                                No need to sign an undertaking

Commencement of Business

                Public limited company

                                Cannot start its business until a Certificate to commencement of business is issued

                Private limited company

                                Start business after its incorporation

Promoters

                Public limited company

                                7 promoters are required

                Private limited company

                                2 promoters are required

Further issue of shares

                Public limited company

                                Has to offer further shares to general public

                Private limited company

                                No need to issue further shares

Statutory meeting

                Public limited company

                                Compulsory to call statutory meeting

                Private limited company

                                Not compulsory to call statutory meeting

Quorum

                Public limited company

                                                Minimum 5 members required

                Private limited company

                                                Minimum 2 members required

Tax

                Public limited company

                                                Relief available tax

                Private limited company

                                                No relief available for tax

Managerial remuneration

                                Public limited company

                                                Should not increase by 11 %

                                Private limited company

                                                No restriction on private limited company

Special privileges

                                Public limited company

                                                No special privilege available

                                Private limited company

                                                Special privilege available

Dissolution

                                Public limited company

                                                Dissolved by court

                                Private limited company

                                                Can be easily dissolved by members

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  1. Taleem-e-Pakistan Zindabaad

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