Private and Public Limited Company

Private limited company: Private limited company is a business entity

incorporated under companies Act 2013, which has minimum two members and
maximum 200 members and it offer limited liability or legal protection for its
shareholders

Public limited company: A public limited company is a business that run by

shareholders the shares can be bought by any one and its shares can be bought on
the stock exchange.

Advantages of Private and public Limited Company:

Private limited company
 Shares are sold to family and
friends
 Raises money for the business
 Someone dies it doesn’t take
effect of running the business
Public limited company
 Limited liability
 Offers continuity separate legal
identity
 Large amount of capital way be
raised- no limits on shareholders

Disadvantages of Private and Public Limited Company:

Private limited company Public limited company
 Share their profits by paying  More regulation
dividends to the shareholders
 Can’t sell share on the stock  Loss of ownership
market
 Startup costs expensive to set up  Lack of control
  Disclosure of companies
financial position.
Difference between Private and Public Limited Company:
Private Limited Company
 It can issue shares to closed
group of persons
 There must be minimum 2
shareholders
 Number of shareholders cannot
exceed 200
 There must be minimum 2
directors in the company
 It has less compliances
 Shares cannot be transferred
easily
Public Limited Company
 It can issue shares to public at
large
 There must be minimum 7
shareholders
 There can be unlimited
shareholders
 There must be minimum 3
directors in the company
 It has more compliances
 Shares can be transferred easily.