This article will help you to make comparison between private limited and public limited companies.
Comparison # Private Limited Company:
1. Membership:
Membership is confined to the close friends and relatives of the promoters. Cannot invite public to share capital.
2. Limits to Membership:
ADVERTISEMENTS:
Minimum members-2
Maximum members – 50
3. Election of Directors:
No need for holding statutory meeting.
ADVERTISEMENTS:
4. Resale of shares:
Shares cannot be resold or transferred without the consent of the company.
5. Audit of accounts:
No legal provision of the audit.
ADVERTISEMENTS:
6. Name:
The words “Private Limited” are used at the end of its name.
7. Number of directors:
Minimum two directors.
ADVERTISEMENTS:
8. Legal controls:
Less legal controls.
Comparison # Public Limited Company:
1. Membership:
Membership is open to the general public. Any person can contribute and become share holder.
ADVERTISEMENTS:
2. Limits to Membership:
Minimum members – 7
Maximum members – No Limit
3. Election of Directors:
ADVERTISEMENTS:
Shareholders elect the directors in the statutory meeting.
4. Resale of shares:
Shares can be resold or transferred without the consent of the company.
5. Audit of accounts:
ADVERTISEMENTS:
Audit of accounts is mandatory and circulated among the members of the company.
6. Name:
The word “Limited” is used at the end of its name.
7. Number of directors:
Minimum 3 directors.
8. Legal controls:
ADVERTISEMENTS:
Strict legal controls.