If just posted on Blog about: Public Company Vs Private Company via Blogg 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. Give Yours valuable Comment and also become a memper of CP Technologies by Joining this blog. er
Posted on: Thu, 16 Oct 2014 17:37:04 +0000