Difference between Private Limited and Public Limited Company - A Private Limited Company
is a form of Joint Stock Company which has restrictions on transfer of shares.
Public Limited Company is a joint stock company which is not a private company or a private
limited company.
Public limited company has been defined as a joint stock company which is not
private limited.
In
case of private limited company, the shares are
not
freely transferable.
In case of public limited company, the shares are freely transferable.
A private limited company requires minimum two directors whereas a public limited company requires
minimum 3 directors.
In case of private limited company, the minimum number of members required are two and the
maximum number of the owners or the members that a private limited company can have is
50.
However, in case of public limited company the minimum number of members required is
seven and there is no upper limit on number of members that a public limited can have.
A private limited company cannot invite general public to subscribe to its shares and debentures
whereas public limited company can invite public.
They can invite public to invest in the shares and debentures of the company.
A public limited company can openly advertise and invite the general public to subscribe
to its shares or debentures.
A private limited company cannot do any such kind of advertisement through which it can
invite general public to invest in the shares of the private limited company or the debentures
of private limited company.
In case of private limited it is compulsory for the company to use the words "private limited"
after the name of the company.
In case of public limited company, it is compulsory to use the word "limited" after the name of
the company.
To start a private limited company, you need to have a minimum paid up capital of Rs.1,00,000/-.
In other words, the owners should invest minimum one lakh to start a private limited company.
The one lakh should be invested from the pocket of the owners or the shareholders.
In case of public limited company, the minimum paid up capital required is rupees five lakhs.
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