Respected Seniors
Good morning, Please do tell me what is the difference among Ltd., Pvt. Ltd. and Public Limited Company. And is there any difference regarding the benefits of the workers offered by these firms or everything is same.
Best Regards

From China, Beijing
Dear Friend,

Ltd company is otherwise known as public limited company and pvt ltd company is a private limited company. Under public limited there are private sector company and public sector company.

The difference between pvt ltd and public ltd company is in the no. of shareholders and transferability of shares. In pvt ltd the minimum no. of shareholders is 2 and maximum is 50 excluding the past and present employees who holds shares . Whereas in public limited the minimum no. of shareholders is 7 and there is no maximum limit.

In the case of public limited co., the shares are freely transferable but it is not so in private limited company.

Some of the strigent requirements which are applicable to public limited companies are not there in the case of private limited companies.

Public sector company is a company where the central govt or state govt or both of them combined together holds the majority of shares. But in Private sector companies the private individuals or business houses holds the majority of shares.

As far as I am concerned there is no significant difference regarding the benefits to be offered by a Private Ltd or Public Ltd Companies. Most of the benefits are reliant on the no. of employees working in a concern.

Hope some of your doubts are cleared.

Thanking you


Manoj Pillai

From India, Coimbatore
Ltd and public ltd companies are one and the same. Pvt Ltd companies are the ones that cannot issue their shares to the public at large and the total number of shareholders in the company is limited to 20 (at least that's the way it was in 19743 when I started my company).
There are no differences relating to compensation rules between public and pvt ltd companies.

From India, Pune
Dear all, Please help me to prepare a MOU between our directors. I need some model or sample for Software based companies. Thanks for supporting a YE. Regards Deva
From India, Madras
Distinction Between A Public Company And a Private Company Following are the main points of difference between a Public Company and a Private Company :-

1. Minimum Paid-up Capital : A company to be Incorporated as a Private Company must have a minimum paid-up capital of Rs. 1,00,000, whereas a Public Company must have a minimum paid-up capital of Rs. 5,00,000.

2. Minimum number of members : Minimum number of members required to form a private company is 2, whereas a Public Company requires atleast 7 members.

3. Maximum number of members : Maximum number of members in a Private Company is restricted to 50, there is no restriction of maximum number of members in a Public Company.

4. Transerferability of shares : There is complete restriction on the transferability of the shares of a Private Company through its Articles of Association , whereas there is no restriction on the transferability of the shares of a Public company

5 .Issue of Prospectus : A Private Company is prohibited from inviting the public for subscription of its shares, i.e. a Private Company cannot issue Prospectus, whereas a Public Company is free to invite public for subscription i.e., a Public Company can issue a Prospectus.

6. Number of Directors : A Private Company may have 2 directors to manage the affairs of the company, whereas a Public Company must have atleast 3 directors.

7. Consent of the directors : There is no need to give the consent by the directors of a Private Company, whereas the Directors of a Public Company must have file with the Registrar a consent to act as Director of the company.

8. Qualification shares : The Directors of a Private Company need not sign an undertaking to acquire the qualification shares, whereas the Directors of a Public Company are required to sign an undertaking to acquire the qualification shares of the public Company .

9. Commencement of Business : A Private Company can commence its business immediately after its incorporation, whereas a Public Company cannot start its business until a Certificate to commencement of business is issued to it.

10. Shares Warrants : A Private Company cannot issue Share Warrants against its fully paid shares, Whereas a Public Company can issue Share Warrants against its fully paid up shares.

11. Further issue of shares : A Private Company need not offer the further issue of shares to its existing share holders, whereas a Public Company has to offer the further issue of shares to its existing share holders as right shares. Further issue of shares can only be offer to the general public with the approval of the existing share holders in the general meeting of the share holders only.

12. Statutory meeting : A Private Company has no obligation to call the Statutory Meeting of the member, whereas of Public Company must call its statutory Meeting and file Statutory Report with the Register of Companies.

13. Quorum : The quorum in the case of a Private Company is TWO members present personally, whereas in the case of a Public Company FIVE members must be present personally to constitute quorum. However, the Articles of Association may provide and number of members more than the required under the Act.

14. Managerial remuneration : Total managerial remuneration in the case of a Public Company cannot exceed 11% of the net profits, and in case of inadequate profits a maximum of Rs. 87,500 can be paid. Whereas these restrictions do not apply on a Private Company.

15. Special privileges : A Private Company enjoys some special privileges, which are not available to a Public Company

From India, Hyderabad

Attached Files
File Type: doc Difference between a Private Ltd and Public Ltd.doc (38.0 KB, 2498 views)

Dear Seniors,
Please inform me the differnce between Ltd and Pvt Ltd as per present law.Please also inform every Ltd company listing in stock exchange is nessesaryor not.Those company r telling that they r Ltd company but not listed in stock exchange can share sell or transfer their share to any one? If yes how?

From India, Delhi
Thanks a lot to Sushma (who raised the question), Mr. Manoj Pillai and Shufiyan, for providing a gud piece of info to me too. Regards, Vinish Kumar Cochin.
From India, Kochi
Private Ltd Companies:

The share holders' requirements are- a minimum of 2.The liabilities are restricted to the share holders' personal wealth and stakes, proportionately.

Any two share holders/directors,in a 3 member organisation, can pass any resolution for the company.

There are no qualifications, for appointment of the directors.

No working experience is required.

There are fewer legal obligations to be fulfilled in the Company Law Board.

The companies are to submit the annual profit and loss account to the Registrar of Companies.

Any appointment/ resignation is to be informed to the ROC.

In a Public Ltd. company, there has to be a minimum of 7 share holders,

to invest for a minimum of one share.

The liabilities of the share holders are prime.

Regular Board Meetings are to be called.

Annual General Body Meetings are to be held every year.

Decisions about the companies activities are to be ratified by the share holders, in the AGMs.

The majority of the Share holders, through the directors, can pass any resolution for the betterment of the company.

For passing any special resolution for the the company, board members would require at least 76% of votes of the share holders to pass the same.

Such resolutions, if passed, can be very serious in nature.

All such resolutions are to be sent to the ROC.

There are requirements of maintaining Minutes' Book of the company.

The share holders cannot be denied to inspect the minutes' book.

The Board of Directors are to be qualified to run a company.

Although there may be several directors in such a company, but the financial implications involves the entire share holders, irrespective of each directors' stake.

Any aggrieved minority share holder (a group), having more than 5%shares, if he feels, that the company is doing something wrong, against the interests of them/him can file a petition in the CLB u/s 398-399 of the Company Act 1956, for mismanagement and winding up of the company.

The obligations are too many to protect the interests of the share holders, having 5% + shares.

As per the new laws, there has to be a company secretary in a public ltd co.

These companies are elligible to float IPO, if there are profits for the last

three years, for any expansion projects, subject to the approval of SEBI.

I think this information is sufficient for you.

Pooja Sharma Parmar

From India, Pune
respected pilai sir, thanks a lot to share with us your knowledge.please guide us how can i set up pvt ltd company from very beginning.whats the steps. regard kuldeep mewara 8802244054
From Canada, Regina
what in case of application of Labour Lawa’s to is it same or are there any exemptions.
From India, Bangalore

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