Which company is a good private limited or limited company? - 0 views
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LegalWiz .In on 31 May 18The differences for Private Limited Company and Public Limited Company are explained as under: · Definitions: Private Limited Company: As per the Companies Act 2013 "Private Company is a company which has a minimum paid-up capital of Rs 1 lakh Rupees and which is restricted to have the right to transfer the share. Public Limited Company:As per the Companies Act 2013" A public Company is a company which is not a private company and has a minimum paid up capital of Rs 5 lakh Rupees and have a right to transfer of shares of a company. · Number of members: There should be minimum 2 members to start a Private Limited Company and maximum ceiling of 200 members. In case of Public Limited Company minimum 7 members should be there and no ceiling on maximum number of members. · Number of Directors: There should be minimum 2 Directors in case of Private limited Company and minimum 3 directors in case of Public Limited Company. · Statutory meeting: A Private company has to hold a statutory meeting within 30 days of Company Incorporation and Public Company has to hold statutory meeting as well file the statutory report with ROC. · Transferability of shares: Articles of Association of restrict the transferability of share in case of Private Limited Company and In case of public limited company there are no such restrictions. · Share Subscription: A private company has no right to invite public for subscription. As opposed, a public company can invite the general public for subscribing shares of the company. · Managerial Remuneration: Total managerial remuneration in the case of a public company cannot exceed 11% of the net profits but in the case of inadequacy of profits a minimum of Rs 50,000 can be paid. These restrictions do not apply to a private company. Conclusion: It is clear from the above points that both the business structure has its own merits and demerits. Private Limited Company is basically suited for the start-ups with limited capital inv