Difference between a public company and a private

company.(sec 2(68))

Nature Public company Private company

1 Minimum Minimum 7 members must be Minimum 2 members must
member required to form a public company be required to form a private
company
2 Max. mumbers There is no maximum limit of the The maximum limit of the
member in public company member in a private company
is 200.
3 Minimum At least 3 directors are required in At least 2 directors are
directors a public company. required in a private
company.
4 Start of business Certificate of incorporation and The certificate of
commencement of business is incorporation is required to
required to start the business. start the business.
5 Public Public subscription of share is Public subscription of share
subscription allowed in public companies. is not allowed in private
companies.
6 Quorum 5 members should be present 2 members should be present
personally at AGM. personally at AGM.
(If the members is not more than
1000 members, the quorum should
be 15 to 5000 members or 30 to
5000)
7 Statutory The statutory meeting is The statutory meeting is
meeting compulsory. optional.
8 Issue of It is their mandate to issue the It is not required in a private
prospectus prospectus. company.
9 Shares Share can be transferred freely in Transfer of share is restricted
transferability public companies. in private companies.

10 Managerial There is no restriction is Managerial remuneration can

remuneration managerial remuneration. exceed 11 % of the net profit.