What is the main difference between a private limited company and a public limited company?

Difference between Public & Private Company

The public limited company is occupied by the government and shareholders, and at least 7 members are required for its establishment. While a private limited company is a company owned by private people; Which requires at least 2 people to set up.

Definition of Private Limited Company

A private limited company is a joint-stock company, set up under the Indian Companies Act, 2013 or any other previous Act.

It is a consortium of voluntarily formed individuals with a minimum paid-up capital of Rs. 1,00,000. A minimum of 2 people is required to open a private limited company. The maximum number of existing employees in a private limited company can be 200.

This type of company is not allowed to sell its shares to the public or the general public. If all these characteristics are found in a company, then that company has to use the word 'Private Limited' at the end of its name.

Examples of Private Limited Companies-

Definition of Public Limited Company

A public limited company or PLC is a joint-stock company registered under the Indian Companies Act, 2013 or any other previous Act. It is an association of voluntarily established individuals with a minimum paid-up capital of Rs. 5 lakhs. To open this type of company, a minimum of 7 members is required but there is no upper limit for maximum members.

There is no restriction on the transfer of shares in this type of company. The company may sell shares or debentures to the general public, And that's why the word 'public limited' is added to the names of such companies.

Examples of Public Limited Companies-