As per the Company Law, there are various points of distinction between a private and a public company. The simplified version of these points are given below:

  1. Minimum number of members : A Private Ltd. Co. needs only 2 members for its formation, while a Public Ltd. Co. requires minimum 7 members for its formation
  2. Maximum number of members : As per the latest law, a Pvt. Co. can have up to 200 members. But for public ltd., the number of members can be unlimited. It can have members equal to the number of shares issued.
  3. Invitation to public : A pvt.ltd. company cannot invite public to subscribe to its share capital. It need not issue a prospectus. But a public ltd. co., cannot proceed without issuing a prospectus or a statement in lieu of prospectus. It has a right to issue shares to the public.
  4. Formalities : Unlike a public ltd.co., a private company is not required to hold a statutory meeting or file a statutory report.
  5. Transfer ability of shares: Shares of a public ltd. Company are freely transferable, but not of a private company.
  6. Restrictions : There are many restrictions regarding managerial remunerations, directors, etc. for a public ltd.co., unlike a private company.
  7. A public ltd. Co., needs to have at least 3 directors, but private can have only 2.
  8. Name : The private company should have “private limited company” written at the end, in its name. But a public company, should have “limited company” written at the end of its name.

This is the difference between the two types of companies in a nutshell. It is easier to start a private limited company in India, as compared to a public limited company.

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