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Comparing Private Limited Company and Public Limited Company
1. Private Limited Company
and
Public Limited Company
By:- Krishna Khataniar
Roll no:- 21
Year:- FY
Division:- 1
2. Contents
1) Definition as per The Companies Act,
1956
2) Differences
3) Similarities
4) Advantages
5) Disadvantages
6) Income tax slab
7) Conclusion
8) References
3. Definition as per
The Companies Act, 1956
A Private Limited Company is a company
having a minimum paid-up capital of ₹1 lac.
A Public Limited Company is a company
having a minimum paid up capital of ₹5 lacs.
4. Differences
Private Co. Public Co.
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
6. 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
7. 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
8. Income Tax slab
For Both Pvt. L.td
Co. and Plc. Ltd.
Co.
30% Income tax
Nil Surcharge
3% Education Cess
9. 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.