1.

Public Limited Company under the Act –

A Public Limited Company under Company Act 2013 is a company that has limited
liability and offers shares to the general public. It’s stock can be acquired by anyone,
either privately through (IPO) initial public offering or via trades on the stock market.
A Public Limited Company is strictly regulated and is required to publish its true
financial health to its shareholders.

2. Characteristics of Public Limited Company –

 Limited Liability - The liability of each shareholder is limited, but does not
offer immunity to the shareholders. The shareholders will be held responsible
for their own actions if it is in contravention to the law.
 Paid up capital – Min 5 lakh or more as prescribed u/ the act
 Prospectus – Must issue a prospectus to the public (statement of the workings
of the company) so that the public can subscribe to the shares issued
 Directors – Minimum 3 directors and Max – no restriction
 Must have Limited as a suffix in the name
 Min 7 shareholders to form the pub company
 Digital signature certificate (DSC) of one of the directors is needed while
submitting self-attested copies of identity and address proof
 Directors of the proposed company will need a DIN
 An application is required to be made for the selection of the name of the
company
 An application comprising the main object clause of the company is to be
made. This object clause will define what a company will pursue after its
incorporation
 Submission of the application to ROC along with the required documents
like MOA, AOA, duly filled Form DIR – 12, Form INC – 7 and Form INC –
22 is needed
 Payment of the prescribed registration fees to the ROC is required
 After obtaining an approval from the ROC, the company should apply for the
‘certificate of business commencement.’
 Other docs - Proof of identity of all the shareholders and directors
 Proof of address of all the directors and the shareholders
 PAN number of all the shareholders and directors
 Utility Bill of the proposed office i.e. proposed registered office for the
company
 A NOC (No Objection Certificate) from the landlord where the office of the
company will be situated

1. Private Limited Company – 2 (68) of act.

Min share capital – 1 lakh or higher
Restriction on the right to transfer shares
Number of members – Max 200

 Provided that where two or more persons hold one or more shares in a company
jointly, they shall, for the purposes of this clause, be treated as a single member:
Provided further that—
(A) persons who are in the employment of the company; and (B) persons who, having been
formerly in the employment of the company, were members of the company while in that
employment and have continued to be members after the employment ceased, shall not be
included in the number of members; and (iii) prohibits any invitation to the public to
subscribe for any securities of the company.”

(B) persons who, having been formerly in the employment of the company, were members of
the company while in that employment and have continued to be members after the
employment ceased, shall not be included in the number of members;

 Prohibits any invitation to the public to subscribe for any securities of the company.”

*Act mentions that financial year for balance sheet will be Thirty-first of March for all the
companies.

Section 11: Comments on the commencement of Business which clearly states that before
starting to function the company has to file with ROC a statement that minimum paid-up
capital (one lakh for the Private company) has been brought in while Section 73 prohibits Pvt
Ltd company to take any unsecured loans or deposits from relatives of Directors.

Section 103 Companies including Private limited companies with a paid-up share capital of
or more than Rupees five crores are required to have full-time CEO/MD/Manager/WTD,
Company Secretary and CFO (Chief Financial Offer).

Section 185 states that private companies are prohibited to give any kind of loan, advances,
security or guarantee to the directors while Section 149 states that one of the Director must
have lived in India for a minimum period of 182 days during the previous year calendar and
he should also give his consent within 30 days of his appointment with the registrar as stated
in Section 152.

Section 162 of the same act states that in a general meeting of the company, the appointment
of two or more persons as directors by a single resolution should not be moved unless a
proposal has been agreed upon before without a single vote against it.

A CSR Committee consisting of at least three directors out of which one must be independent
and spend two percent of the net profit on CSR activities is now mandatory according
to Section 135. Companies having subsidiaries (Associates or Joint Ventures) need to prepare
consolidated accounts as stated in Section 129.

Section 139 - appointment of Auditor will be on five-year terms and should be a subject to
ratification every year and according to Section 141 only Twenty auditors can be appointed
by a Private Limited company or any company for that matter and a company cannot appoint
a person as an auditor if he already is an auditor to twenty different companies also stated in
the very same section.

Section 92 - Private company if small should have one CS if not then one director other than
that if it’s not small then CS and Director or PCS and Director.
Authentication of financial statements of the company should be done by CEO or
Chairperson according to Section 134 and a Chairperson can also sign a director’s report as
stated in the very same section.

The private Limited company requires a minimum of two directors, two members, and two
shareholders to register itself legally.
- Followed by registration
- Can avail tax benefits and exemptions
- Limited liabilities to shareholders
- The director of a private limited company plays an important role in the working of
the company.
- A maximum of fifteen directors is allowed in a company as per the Companies Act,
2013 laid out by MCA or Ministry Of Corporate Affairs.
- Director of a private limited company enjoys certain benefits, though he is expected to
perform particular duties.
- A director can be a shareholder as well as a member at the very same time.
- A director is appointed through the voting procedure by the shareholders of the
company.

Limited Liability Act, 2008

LLP’s – Mix between a partnership + corporation
- partners have limited liability in the company which means that personal assets of the
partners are not used for paying off the debts of the company.
- LLP Act 2008
- Provisions of the Partnership act are not applicable to LLP Act
- S3 - Limited liability partnership to be body corporate.

- 3. (1) A limited liability partnership is a body corporate formed and incorporated

under this Act and is a legal entity separate from that of its partners.

- (2) A limited liability partnership shall have perpetual succession;

- (3) Any change in the partners of a limited liability partnership shall not affect the
existence, rights or liabilities of the limited liability partnership.

- S 6 (1) – Minimum 2 partners

- S6 (2) - If at any time the number of partners of a limited liability partnership is

reduced below two and the limited liability partnership carries on business for more
than six months while the number is so reduced, the person, who is the only partner of
the limited liability partnership during the time that it so carries on business after
those six months and has the knowledge of the fact that it is carrying on business with
him alone, shall be liable personally for the obligations of the limited liability
partnership incurred during that period.

- Perpetual succession

- Body corporate

- Separate legal entity

 - Common seal

- Profit only – motive

- CG can start an investigation or has the power to

- Docs must be filed in the MCA website, partner to provide a digi signature

- Flexible capital structure

HUF, Partnerships, estates