Differences between Private and Public companies

Basis for Comparison

Criteria	Private Limited Company	Public Limited Company
Meaning	Not listed on a stock exchange, shares held privately by members.	Listed on a recognized stock exchange, shares traded openly by the public.
Minimum number of members	2 (except in the case of a one-person company).	7
Maximum number of members	200 (except in the case of a one-person company).	Unlimited
Minimum number of directors	2	3
Articles of Association	Must frame its own articles of association.	Can frame its own articles of association or adopt Table F.
Transfer of Shares	Shares not freely transferable, restrictions in Articles of Association.	Shares freely transferable, traded openly on a stock exchange.
Public Subscription	Issue of shares or debentures to the public is prohibited.	Can invite the public to subscribe to its shares or debentures.
Issue of Prospectus	Prohibited from issuing a prospectus.	Can issue a prospectus or opt for private placement.
Minimum Amount of Allotment	Can allot shares without obtaining minimum subscription.	Cannot allot shares unless the minimum subscription is obtained.
Commencement of Business	Can start a business after receiving a certificate of incorporation.	Requires a certificate of commencement of business after incorporation.
Appointment of Director	Two or more directors can be appointed by a single resolution.	One director can be appointed by a single resolution.
Filing of Consent to Act	Directors need not file their consent to act as a director.	Directors must file their consent to act within 30 days of appointment.
Retirement of Directors by Rotation	Directors not required to retire by rotation; can be permanent.	2/3rd of total directors must retire by rotation.
Exemptions	Enjoys many privileges and exemptions.	No such privileges and exemptions.
Place of Holding AGM	AGM can be held anywhere.	AGM held at the registered office or any other place where the registered office is situated.
Statutory Meeting	Optional	Compulsory
Quorum	2 members constitute a quorum, irrespective of the number of members.	5 members for up to 1000 members, 15 members for 1000 to 5000 members, 30 members for more than 5000 members.