A Public Company is a concept which is very similar to Private Company, apart from few characteristics. However, a major positive for a Public Company is that there is no upper limit with regard to the number of shareholders that can form part of the Public Company. This feature helps the Company to raise adequate capital for the Company to expand its operations in different horizons. One of the most popular way to raise capital by Public Companies is by way of Initial Public Offer (IPO). In contrast to Public Company, a Private company can never come with an IPO.
Following is the comparison between a Public Company and Private Company, based upon certain features:
Basis |
Private Company |
Public Company |
Minimum Share Capital |
Rs. 1,00,000 |
Rs. 5,00,000 |
Number of members |
Minimum: 2 |
Minimum: 7 |
Restriction on Name of Company |
Name should end with “Private Limited” |
Name should end with “Limited” |
Issue of Securities |
By way of Right Issue or Bonus Issue or by way of Private Placement |
To Public through Prospectus (“Public Offer”) or by way of Right Issue or Bonus Issue or through Private Placement |
Minimum number of Directors |
Two |
Three |
Checking the name availability of the Company and applying to ROC for obtaining the approval of the name.
Applying for the DIN and digital signatures of the Directors of the Company.
Drafting of the Memorandum and the Articles of association of the Company.
Filing of the all the relevant documents with the ROC and obtaining the Certificate of Incorporation of Company.
Opening the bank account and applying for PAN/ TAN/ other registrations.
– The Director needs to be over 18 years of age and must be a natural person. Foreign nationals can also be directors in an Indian Public Limited Company. However, out of the 3 directors, atleast 1 should be an Indian resident.
– Yes, Company can be given any name provided it should comply with the rules as laid down in the Companies (Incorporation) Rules, 2014.
– Yes. DIN is a unique identification number that is required for all the Directors and DSC is required for the Directors to sign the forms electronically.
– Yes, a Foreign National or an NRI Foreign Companies can hold shares of a Private Limited Company subject to Foreign Direct Investment (FDI) Guidelines.
– No. Only Public Companies, which satisfy certain conditions, have the option to list their shares on the recognized stock exchange. However, it is not necessary that all the public companies have their shares listed on the Stock exchange.
– No it is not mandatory to have a proper place of business to incorporate a Company. However, you shall need to have a place which shall act as the Registered Address of the Incorporated Company.
– For Domestic Companies: September 30 of each year For Companies governed by Transfer Pricing provisions: November 30 of each year.
– The date of issuance of Certificate of Incorporation of the Company shall be the date of incorporation of the Company.
– Yes, as per the provisions of the Companies Act, 2013, all companies shall need to get its accounts audited by the Statutory Auditor, who shall be Chartered Accountant or a Company of Chartered Accountant.
– Before April 1, 2017:
All companies: 30% as increased by surcharge and education cess
After April 1, 2017:
Companies having turnover < Rs. 50 crores: 25% as increased by surcharge and education cess.
Companies having turnover > Rs. 50 crores: 30% as increased by surcharge and education cess.