Comparing Private Limited Company and Public Limited Company
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Transcript of Comparing Private Limited Company and Public Limited Company
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Private Limited CompanyPrivate Limited Company and and Public Limited Company Public Limited Company
By:- Krishna Khataniar
Roll no:- 21
Year:- FY
Division:- 1
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Contents
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Definition as per Definition as per The Companies Act, 1956 The Companies Act, 1956
A Private Limited Company is a company A Private Limited Company is a company having a minimum paid-up capital of 1 lac.₹having a minimum paid-up capital of 1 lac.₹
A Public Limited Company is a company A Public Limited Company is a company having a minimum paid up capital of 5 lacs.₹having a minimum paid up capital of 5 lacs.₹
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Differences
Min. 2 persons required
Can not trade share on stock market
May operate different businesses
AGM is not mandatory
Min. 7 persons required
Can trade share on stock market
Generally operates specific business
AGM is mandatory
Private Co. Public Co.
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Similarities
Shareholders are owners
Limited LiabilityPvt. Plc.
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Advantages of These Companies
Private Co. Public Co.
Limited liability Continuity of
existence More capital can be
raised as max. members can be 50
Limited liability Separate legal
entity, continuity of business
Can raise large capital
Shares transferable
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Disadvantages of these companies
Private Co. Public Co.
¤ Shares can not be sold to general public
¤ Restricted to trade under name of an existing company
¤ Growth may be limited as max. shareholders are 50
¤ Costly as there are a lot of formalities for commencing
¤ Face management problems
¤ May suffer from diseconomies of scale
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Income Tax slab
For Both Pvt. L.td Co. and Plc. Ltd. Co.
Income tax30%
Nil Surcharge
3% Education Cess
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Conclusion
If you have a small capital, then Private Co. is preferable or if you have a large capital and if you want to have a large share in the market, you can form a Public Co.
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References
Information:-
1.Wikipedia.com2.Dineshbakshi.com3.eHow.com4.http://company-registration.pro/
Photos and Clip arts:-
1.Clker.com2.Wikipedia.com
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Thank You…