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    Public Company & Private Company: Notes

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    Pacific Hunter Johnny
    This document defines and compares public and private companies. [1] A public company is incorporated under company law and is not a private company. [2] It has more members, issues prospectuses, freely transfers shares, and has more directors and statutory requirements. [3] A private company restricts share transfers and has fewer than 50 members, does not invite public subscription, and has fewer formation and reporting requirements than a public company.

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    Public Company & Private Company: Notes

    Uploaded by

    Pacific Hunter Johnny
    63 views9 pages
    This document defines and compares public and private companies. [1] A public company is incorporated under company law and is not a private company. [2] It has more members, issues prospectuses, freely transfers shares, and has more directors and statutory requirements. [3] A private company restricts share transfers and has fewer than 50 members, does not invite public subscription, and has fewer formation and reporting requirements than a public company.

    Original Title

    Lecture-4.ppt

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    This document defines and compares public and private companies. [1] A public company is incorporated under company law and is not a private company. [2] It has more members, issues prospectuses, freely transfers shares, and has more directors and statutory requirements. [3] A private company restricts share transfers and has fewer than 50 members, does not invite public subscription, and has fewer formation and reporting requirements than a public company.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    63 views9 pages

    Public Company & Private Company: Notes

    Uploaded by

    Pacific Hunter Johnny
    This document defines and compares public and private companies. [1] A public company is incorporated under company law and is not a private company. [2] It has more members, issues prospectuses, freely transfers shares, and has more directors and statutory requirements. [3] A private company restricts share transfers and has fewer than 50 members, does not invite public subscription, and has fewer formation and reporting requirements than a public company.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 9

    Public Company

    &
    Private Company

    Notes

    1
    Definition of Public Company

    Public company means a company incorporated under


    this Act or under any law at any time in force before
    the commencement of this Act and which is not a
    private company.
    -Section 2 (1)(r), the Companies Act,1994

    Prepared by Abu Nayem Miazi 2


    Assistant Professor
    Characteristics of Public Company
    • Number of members.
    • Prospectus.
    • Transferability by shares.
    • Liability.
    • Number of directors.
    • Certificate of commencement.
    • Statutory meeting and statutory report.
    • Statutory liability.

    Prepared by Abu Nayem Miazi 3


    Assistant Professor
    Definition of Private Company

    A Private Company is a company which its by articles,


    a. restrict the right to transfer its shares, if any;
    b. limit the number of its members to 50, excluding
    members who are or were in the employment of the
    company; and
    c. Prohibits and invitation to the public to
    subscribe for any shares in, or debentures of, the
    company.
    -Section 2 (1)(q), the Companies Act,1994

    Prepared by Abu Nayem Miazi 4


    Assistant Professor
    Characteristics of Private Company
    • Number of members.
    • Adding the word, limited.
    • Restriction of transfer shares.
    • Commencement of business.
    • Rising capital
    • Limited liability

    Prepared by Abu Nayem Miazi 5


    Assistant Professor
    Differences between
    private and public company

    Private Public
    As to formation Not complicated Too much Complicated
    As to number of At least 2 & maximum 50 At least 7 & no limit for
    members maximum
    As to After registration After obtaining certificate
    commencement of of incorporation
    business
    As to prospectus Is not required Is required
    As to transfer of Not freely transferable Freely transferable
    shares

    Prepared by Abu Nayem Miazi 6


    Assistant Professor
    Differences between
    private and public company

    Private Public
    As to Capital Requires less capital Requires huge capital
    As to adding ‘Private Limited’ Only the words ‘limited’
    ‘limited’ clause
    As to number of At least 2 At least 3
    directors
    As to Formation of Not necessary for every year necessary for every year
    Board of Directors
    As to Remuneration No hard and fast rule Determined by the
    company in the general
    meeting
    Prepared by Abu Nayem Miazi 7
    Assistant Professor
    Differences between
    private and public company
    Private Public
    As to Statutory Not mandatory Must be held within 6
    Meeting and report month from the date of its
    incorporation
    As to Quorum 2 for does not exceed 6 5
    3 for exceeds 6
    As to right to vote As a director, Director has right to As a director, Director has
    vote for his interest no right to vote for his
    interest
    As to Articles of It is compulsory It is not compulsory
    association
    As to public It is not required It is required
    subscription
    Prepared by Abu Nayem Miazi 8
    Assistant Professor
    Differences between
    private and public company

    Private Public
    As to member’s It is not required It is required
    index
    As to issue of share Can’t issue share warrant Can do so
    warrants
    As to issue of right It is required It is not required
    shares
    As to Maintaining It is easy to maintain(few member) It is not easy to
    good relationship maintain(large member)

    Prepared by Abu Nayem Miazi


    Assistant Professor 9

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