tag:blogger.com,1999:blog-534039362241552113.post3295256893116452202..comments2023-09-27T19:59:48.883+05:30Comments on Infinite Soluzioni: Distinguish between private and public companies.Abhishek Kumarhttp://www.blogger.com/profile/16471967739123332387noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-534039362241552113.post-251229815162647622013-01-21T01:16:38.526+05:302013-01-21T01:16:38.526+05:30The distinction between a public company and a pri...The distinction between a public company and a private company are explained in the following manner:<br /> <br />1. Minimum number of members<br /> <br />The minimum number of person required to form a public company is seven, whereas in a private company their number is only two.<br /> <br />2. Maximum number of members<br /> <br />There is no limit on the maximum number of member of a public company, but a private company cannot have more than fifty members excluding past and present employees.<br /> <br />3. Commencement of Business<br /> <br />A private company can commence its business as soon as it is incorporated. But a public company shall not commence its business immediately unless it has been granted the certificate of commencement of business.<br /> <br />4. Invitation to public<br /> <br />A public company by issuing a prospectus may invite public to subscribe to its shares whereas a private company cannot extend such invitation to the public.<br /> <br />5. Transferability of shares<br /> <br />There is no restriction on the transfer of share In the case of public company whereas a private company by its articles must restrict the right of members to transfer the share.<br /> <br />6. Number of Directors<br /> <br />A public company must have at least three directors whereas a private company may have two directors.<br /> <br />7. Statutory Meeting <br /><br />A public company must hold a statutory meeting and file with the register a statutory report. But in a private company there are no such obligations.<br /> <br />8. Restrictions on the appointment of Directors<br /> <br />A director of a public company shall file with the register a consent to act as such. He shall sign the memorandum and enter into a contact for qualification shares. He cannot vote or take part in the discussion on a contract in which he is interested. Two-thirds of the directors of a public company must retire by rotation. These restrictions do not apply to a private company.<br /> <br />9. Managerial Remuneration <br /><br />Total managerial remuneration in the case of public company cannot exceed 11% of net profits, but in the case of inadequacy of profit a minimum of Rs. 50, 000 can be paid. These restrictions do not apply to a private company.<br /> <br />10. Further Issue of Capital<br /> <br />A public company proposing further issue of shares must offer them to the existing members. A private company is free to allot new issue to outsiders.<br /> <br />11. Name <br /><br />A private company has to use words ‘private limited’ at the end of its name. But a public company has to use only the word ‘Limited’ at the end of its name.<br />pamhttps://www.blogger.com/profile/11591374347650802758noreply@blogger.com