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P RIVATE AND P UBLIC C OMPANIES

Introduction:

One of the most important types of business entities in the commercial world today are

companies. In India, a company can be defined as any entity registered as a company under

the Companies Act 2013, or any such act before it or under any such act outside India.

he Companies Act further di!ides the term Company into two types" #ublic Company and

#ri!ate Company.

Difference between a Pub ic and Pri!ate Co"#an$:

Pri!ate Co"#an$ Pub ic Co"#an$

$inimum paid up capital of %s. 1 &a'h.

()ection 2*

$inimum paid up capital of %s. + &a'h

()ection 2*

eeds 2 to 200 members ()ection 3* eeds - or more members ()ection 3*

Cannot in!ite or accept deposits from personsother than its members, directors or their

relati!es

()ection 23*

o such prohibition

%e uires minimum 2 directors ()ection 1/ * %e uires minimum 3 directors ()ection 1/ *

$ust contain the words pri!ate limited at

the end of the name. ()ection /*

$ust contain public limited at the end of

the name ()ection /*

ntrenchment in the articles to be agreed andappro!ed by all members ()ection +*

ntrenchment in the Articles to appro!edthrough a special resolution (section +*

he 4uorum of meetings is 2 members

()ection 103*

4uorum of meetings depends on the number

of shareholders ()ection 103*An internal audit mandatory if the turno!er is

greater than 200 crore in the pre!ious

financial year or loan from ban' is greater

than 100 crore ()ection 135*

Internal audit mandatory if paid up capital is

greater than %s. +0 Crore, urno!er is greater

ro e ual to than %s. 200 crore or the public

deposit is e ual to or greater than %s. 2+

Crores o %estriction on amount of managerial $anagerial remuneration restricted to 116 of

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remuneration ()ection 1 -* net profit or at least %s. 30 &a'h per annum,

depending upon the paid up capital.

Pro!i%ion% a## icab e to #ub ic i"ited co"#anie% on $:

• )ection 2 7 #ublic offer of )ecurities ha!e to be in dematerialised form• )ection /07 )ecurities offered in public offer must be listed in stoc' e8change• )ection 1+27 $inimum of 293rds of total number of directors must be liable to retire

by rotation• )ection 1 07 Contract of employment with managing or whole"time directors (this

section does not apply to pri!ate limited companies*

:All sections mentioned abo!e refer to the Companies Act 2013.