What is the basic Difference between Private Company & Public Company?
Generally, it creeps into the mind that what is the meaning of private and public companies and how they are different from each other, through this blog we are trying to clear your confusion. After reading the blog you will get the concept.
| S. No. | Private Company | Public Company |
| 1. | Means a Company registered under the Companies Act, 2013 or under any previous company law as a Private Limited. | Means a Company registered under the Companies Act, 2013 or under any previous company law as a Public Limited. |
| 2. | The name of the company is written as “XYZ Private Limited”. | The name of the company is written as “XYZ Limited”. |
| 3. | The liability of the members is limited. | The liability of the members is limited. |
| 4. | Minimum two (2) Members are required for the formation of the Company. | Minimum seven (7) Members are required for the formation of the Company |
| 5. | Minimum- two (2) Directors are required in the Board of the Company. | Minimum- three (3) Directors are required in the Board of the Company. |
| 6. | Maximum fifteen (15) directors are allowed on the Board of the company. This limit can be increased by passing the Special Resolution. | Maximum fifteen (15) directors are allowed on the Board of the company. This limit can be increased by passing the Special Resolution. |
| 7. | Articles of Association of Private Company shall contain three restrictions as follows:- Right to transfer its shares. Invitation to the public to subscribe to any securities of the company. Number of its members to two hundred. Provided that, Joint shareholders shall be considered as single and Person in employment or person to whom shares are allotted during employment shall not be considered in the limit of two hundred. | Articles of Association of public companies do not have any restrictions. |
| 8. | Company law allows some relaxation for private companies. | Law is strict on public companies as compared to Private companies. |