{"id":6052,"date":"2022-10-11T08:51:58","date_gmt":"2022-10-11T08:51:58","guid":{"rendered":"https:\/\/commerceiets.com\/?p=6052"},"modified":"2022-10-11T08:51:58","modified_gmt":"2022-10-11T08:51:58","slug":"difference-between-public-and-private-company-under-companies-act-2013","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/difference-between-public-and-private-company-under-companies-act-2013\/","title":{"rendered":"DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY UNDER COMPANIES ACT 2013"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_72 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/difference-between-public-and-private-company-under-companies-act-2013\/#DIFFERENCE_BETWEEN_PUBLIC_AND_PRIVATE_COMPANY_UNDER_COMPANIES_ACT_2013\" title=\"DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY UNDER COMPANIES ACT 2013\">DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY UNDER COMPANIES ACT 2013<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/difference-between-public-and-private-company-under-companies-act-2013\/#DIFFERENCE_BETWEEN_PUBLIC_AND_PRIVATE_COMPANY\" title=\"DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY\">DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY<\/a><\/li><\/ul><\/nav><\/div>\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"DIFFERENCE_BETWEEN_PUBLIC_AND_PRIVATE_COMPANY_UNDER_COMPANIES_ACT_2013\"><\/span>DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY UNDER COMPANIES ACT 2013<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><strong>PRIVATE COMPANY: <\/strong>Section 2(68) of the Companies (Amendment) Act, 2015 defines a Private Company as a company which has a minimum paid up capital as may be prescribed, and by its articles:<\/p>\n\n\n\n<p>(i) restricts the rights of its members to transfer of share, (if it has any);<\/p>\n\n\n\n<p>(ii) except in case of one person company, limit the number of its members to two hundred (200), which does not include.<\/p>\n\n\n\n<p>(a) members who are the employees and members of the company.<\/p>\n\n\n\n<p>(b) members who, while they were employees of the company, were also it members and continue to be its members after leaving its employment.<\/p>\n\n\n\n<p>Where two or more persons hold one or more shares in a company jointly. They for the purposes of this clause be treated as a single member.<\/p>\n\n\n\n<p>(iii) prohibits any invitation to the public to subscribe for any securities of the company.<\/p>\n\n\n\n<p><strong>PUBLIC COMPANY: <\/strong>According to Section 2(71) of the Companies (Amendment) Act, 2015 public company&#8217; means:<\/p>\n\n\n\n<p>(i) A company which is not a private company.<\/p>\n\n\n\n<p>(ii) has a minimum paid up capital as may be prescribed.<\/p>\n\n\n\n<p>A company which is a subsidiary of a company, not being a private company, shall be deemed to be a Public Company for the purposes of this Act even where such subsidiary continues to be a private company in its articles.<\/p>\n\n\n\n<p>Thus, a public company may be said to be an association consisting of not a Private Company within the meaning of the Act. The shares and debentures of a Public Company may be listed on a Stock Exchange and are offered to public for sale.<\/p>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\"><span class=\"ez-toc-section\" id=\"DIFFERENCE_BETWEEN_PUBLIC_AND_PRIVATE_COMPANY\"><\/span>DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Basis of Difference<\/strong><\/td><td><strong>Private Company<\/strong><\/td><td><strong>Public Company<\/strong><\/td><\/tr><tr><td><strong>Number of members<\/strong><\/td><td>The minimum number of members is 2 and the maximum number of members excluding the present and past employees is 200.<\/td><td>The minimum number of members is 7 and the maximum can be as many as the number of shares of the company.<\/td><\/tr><tr><td><strong>Invitation to Public<\/strong><\/td><td>A private company cannot invite the public to invest in its shares. It needs to arrange the required capital from its own sources.<\/td><td>A public company arranges the total capital requirement from the public. To do that, it invites the public to invest in its shares and debentures.<\/td><\/tr><tr><td><strong>Allotment of shares<\/strong><\/td><td>A private company can allot shares immediately on the receipt of the incorporation certificate.<\/td><td>A public company cannot allot its shares to the public.<\/td><\/tr><tr><td><strong>Commencement of business<\/strong><\/td><td>A private company can commence its business immediately on the receipt of the certificate of incorporation.<\/td><td>A public company cannot commence its business so long as it gets an official letter of commencement to do so.<\/td><\/tr><tr><td><strong>Issue of prospectus<\/strong><\/td><td>A private company cannot issue a prospectus or a statement in lieu of prospectus.<\/td><td>It is mandatory for a public company to issue a prospectus. In the absence of a prospectus, it is necessary to issue a statement in lieu of prospectus.<\/td><\/tr><tr><td><strong>Transfer of shares<\/strong><\/td><td>The transfer of shares is restricted to a specified limitation.<\/td><td>The transfer of shares is not restricted and it is at the will of the shareholders.<\/td><\/tr><tr><td><strong>Preparation of Articles<\/strong><\/td><td>Preparation of articles is mandatory for a private company.<\/td><td>Preparation of Articles is not compulsory in a public company. In case the Articles are not registered, the provisions of Schedule 1A Table shall be applicable.<\/td><\/tr><tr><td><strong>Issue of bearer share warrant<\/strong><\/td><td>A private company cannot issue a bearer share warrant.<\/td><td>A public company may issue bearer share warrants if the shares of the company are fully paid-up.<\/td><\/tr><tr><td><strong>Number of directors<\/strong><\/td><td>There must be at least two directors.<\/td><td>There must be at least three directors.<\/td><\/tr><tr><td><strong>Qualification shares<\/strong><\/td><td>It is not mandatory for the directors to have qualification shares in a private company.<\/td><td>It is mandatory for the directors of a public company to have qualification shares.<\/td><\/tr><tr><td><strong>Increase in number of directors<\/strong><\/td><td>A private company can increase its number of directors without the permission of the government.<\/td><td>A public company cannot increase the number of its directors without the permission of the Central Government.<\/td><\/tr><tr><td><strong>Loan to directors<\/strong><\/td><td>It is not necessary for a private company to get prior permission of the Central Government to give loan to its directors.<\/td><td>Prior permission of the Central Government is necessarily required for a public company to give loan to its directors.<\/td><\/tr><tr><td><strong>Retirement of directors by Rotation<\/strong><\/td><td>It is not required by the law for the directors of a private company to retire by rotation.<\/td><td>One-third of the directors of a public company are required to retire by rotation.<\/td><\/tr><tr><td><strong>Filing of documents<\/strong><\/td><td>A private company need not to submit the following documents to the Registrar of the Companies: (a) list of directors; (b) consent of directors; (c) copy of any contract with the directors.<\/td><td>For the incorporation of a public company, it is compulsory to file these documents with the Registrar of companies.<\/td><\/tr><tr><td><strong>Share Capital<\/strong><\/td><td>The minimum paid up share capital should be \u20b91,00,000.<\/td><td>The minimum paid-up share Capital should be \u20b95,00,000.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>ALSO STUDY:<\/strong><\/td><td><strong>ALSO STUDY:<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/features-of-companies-under-companies-act-2013\/\">Features of companies under companies act 2013<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/lifting-up-of-corporate-veil-under-companies-act-2013\/\">Lifting up of corporate veil&nbsp;<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/special-privileges-of-private-company-under-company-law\/\">Special privileges of private company under company law<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/conversion-of-public-company-into-private-company\/\">Conversion of public company into private company<\/a><\/td><\/tr><\/tbody><\/table><figcaption>DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY UNDER COMPANIES ACT 2013<\/figcaption><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"612\" height=\"290\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/10\/Public-Company-vs-Private-Company-1.jpg\" alt=\"DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY UNDER COMPANIES ACT 2013\" class=\"wp-image-6053\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/10\/Public-Company-vs-Private-Company-1.jpg 612w, https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/10\/Public-Company-vs-Private-Company-1-300x142.jpg 300w\" sizes=\"auto, (max-width: 612px) 100vw, 612px\" \/><figcaption>DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY UNDER COMPANIES ACT 2013<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY UNDER COMPANIES ACT 2013 PRIVATE COMPANY: Section 2(68) of the Companies (Amendment) Act, 2015 defines a Private Company as a company which has a minimum paid up capital as may be prescribed, and by its articles: (i) restricts the rights of its members to transfer of share, (if it&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/difference-between-public-and-private-company-under-companies-act-2013\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;DIFFERENCE BETWEEN PUBLIC AND PRIVATE COMPANY UNDER COMPANIES ACT 2013&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":6053,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[367,56],"tags":[374,363,115],"class_list":["post-6052","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-or-company-law","category-difference-between","tag-difference-between-public-and-private-company","tag-private-company","tag-public-company"],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/6052","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=6052"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/6052\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/6053"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=6052"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=6052"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=6052"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}