Difference Between Pvt Ltd and Public Ltd Company ?

Difference Between Pvt Ltd and Public Ltd Company  

A ‘Company’ is an association of persons, incorporated under The Indian Companies Act, 2013 or any other previous act. It is an artificial person having a separate legal entity, i.e. its identity is distinct from its members (who subscribe the memorandum of association of the company and whose name has been entered in the register of members) with limited liability. The company has a common seal, perpetual succession and it can sue and be sued in its own name.

There are some companies registered under this act, some of them are public limited company while others are a private limited company. The difference between public and private company is given as under:

Content: Public Ltd. Company Vs Private Ltd. Company

1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion

Comparison Chart

Basis for Comparison	Public Company	Private Company
Meaning	A public company is a company which is owned and traded publicly	A private company is a company which is owned and traded privately.
Minimum members	7	2
Maximum members	Unlimited	50
Minimum Directors	3	2
Minimum paid up capital	5,00,000	1,00,000
Suffix	Limited	Private Limited
Start of business	After receiving certificate of incorporation and certificate of commencement of business.	After receiving certificate of incorporation.
Statutory Meeting	Compulsory	Optional
Issue of prospectus / Statement in lieu of prospectus	Obligatory	Not required
Public subscription	Allowed	Not allowed
Quorum at AGM	5 members must present in person.	2 members must present in person.
Transfer of shares	Unrestricted	Restricted

Definition of Public Ltd. Company

A Public Limited Company or PLC is a joint stock company formed and registered under The Indian Companies Act, 2013 or any other previous act. It is an association of persons formed voluntarily, having a minimum paid up capital of Rs. 5,00,000.
There is no defined limit on the number of members the company can have. Also, there is no restriction on the transferability of the shares. The company can invite the public for the subscription of shares or debentures, and that is why the term ‘Public Limited’ gets added to its name.

Definition of Private Ltd. Company

A Private Limited Company is a joint stock company, incorporated under The Indian Companies Act, 2013 or any other previous act. It is an association of persons formed voluntarily, having the minimum paid up capital of Rs. 1,00,000. The maximum number of members is 50, excluding the current employees and the ex-employees who were the members during their employment or continues to be the member after the termination of employment in the company.
The company restricts the transfer of shares and prohibits invitation to the public for the subscription of shares and debentures. It uses the term ‘private limited’ at the end of its name.

Key Differences Between Public and Private Ltd. Company

The difference between public and private company can be drawn clearly on the following grounds:

1. The public company refers to a company that is listed on a recognised stock exchange and traded publicly. A Private Ltd. the company is one that is not listed on a stock exchange and is held privately by the members.
2. There must be at least seven members to start a public company. As against this, the private company can be started with minimum two members.
3. The is no ceiling on the maximum number of members in a public company. Conversely, a private company can have a maximum of 100 members, subject to certain conditions.
4. A public company should have at least three directors whereas the Private Ltd. company can have a minimum of 2 directors.
5. It is compulsory to call a statutory general meeting of members, in the case of a public company, whereas there is no such compulsion in the case of a private company.
6. In a Public Ltd. Company, there must be at least five members, personally present at the Annual General Meeting (AGM) for constituting the requisite quorum. On the other hand, in the case of a Private Ltd. Company, that number is 2.
7. The issue of prospectus/statement instead of the prospectus is mandatory in case of a public company, but this is not the case with the private company.
8. To start a business, the public company needs a certificate of commencement of business after it is incorporated. In contrast, a private company can start its business just after receiving a certificate of incorporation.
9. The transferability of shares of a Pvt. Ltd. company is completely restricted. On the contrary, the shareholders of a public company can freely transfer their shares.
10. A public company can invite the general public for subscribing shares of the company. As opposed, a private company has no right to invite public for subscription.

Conclusion

After discussing these two entities, it is very clear that there are so many aspects which distinguish them. Apart from the above-mentioned differences there are many other differences like, a public company can issue share warrant against its fully paid share to the shareholders, which a private company cannot.
The scope of a Private Ltd. The company is limited, as it is limited up to a few number of people, and enjoys less legal restrictions. On the other hand, the scope of a Public Ltd. company is vast, the owners of the company can raise capital from the general public and have to abide by several legal restrictions.

Difference Between Corporation and Company

There are two terms COMPANY and CORPORATION, which are mostly used by us interchangeably. All of us have hundreds and hundreds of doubts regarding these two as we don’t know their real meanings. We often use them freely without knowing them. So come, let’s start the understanding the meaning and difference between the Company and Corporation.

Content: Company Vs Corporation

1. Comparison Chart
2. Definition
3. Key Differences
4. Similarities
5. Conclusion

Comparison Chart

Basis for Comparison	Company	Corporation
Meaning	A company which is created and registered under the Indian Companies Act, 1956 is known as a Company.	The company which is formed and registered in or outside India is known as a Corporation.
Defined in which section of Indian Companies Act 1956	Section 3	Section 2 (7)
Incorporated	In India	In and Outside India
Minimum Authorized Capital	As per the rules	5 crores
Scope	Comparatively less	Wide

Definition of Corporation

The term Corporation as defined in section 2 (7) of the Indian Companies Act, 1956 as a body corporate, which is incorporated inside or outside the country, but excludes co-operative society, corporation sole and any corporation which is formed by the notification in the Official Gazette by the Central  Government.
A corporation is a business organization having a separate legal entity, i.e. its identity is distinct from its owners. It can sue or be sued in its name, with limited liability i.e. the liability of the members is limited up to amount unpaid on shares held by them, having authorized capital of at least five crores, and continued existence. Corporate Tax is levied on the income of the corporation under the Income Tax Act, 1961.

Definition of Company

The term Company is defined in section 3 of the Indian Companies Act, 1956 as a company formed and registered under this Act or any other previous acts. A company is a voluntary association of two or more than two persons joined for a common objective, treated as a distinct legal personality and perpetual succession.
The company is considered as an artificial person having a common seal and registered head office. As similar to a Corporation, the company has a right to sue or be sued in its own name.
The company can be of the following types:

• A company limited by shares
• Limited Liability Company (LLC)
• A company limited by guarantee.
• A company limited by both share and guarantee.
• Unlimited Company.

Key Differences Between Corporation and Company

1. The word Corporation is defined in section 2 (7) of the Companies Act while the term Company is defined in section 3 of the Companies Act.
2. The corporation came into existence if it is incorporated in or outside India whereas a company came into existence when it is incorporated under the Indian Companies Act, 1956.
3. The Corporation should have a minimum authorized capital of Rs. 5,00,00,000. Conversely, the Company should have a minimum authorized capital of Rs 1,00,000 in the case of private company and Rs. 5,00,000 in the case of public company.
4. The Corporation is a larger term as compared to the Company.

Similarities

• Separate Legal Entity
• Perpetual Succession
• Right to sue and be sued
• Limited Liability
• Artificial Legal Person

Conclusion

The difference between Company and Corporation is subtle but still the scope of the word Corporation is larger than the Company. Corporate Tax is levied on both the entities as per the Income Tax Act, 1961. Hence, we can say that the terms cannot be used synonymously.

Difference Between LLC and Inc.

The basic question that arises before the entrepreneurs when starting a new business venture is, which business type to choose? The business structure is not just a status, rather all the legal formalities, before and after the business is set up, depends on the type itself. So, along with discovering an innovative idea for launching a business, the businessperson should also make plans for the structure, they want for their business, to make it successful.

While making a choice between business types, most business owners get confused between LLC or Inc. The former combines two forms of business, i.e. partnership and corporation. On the other hand, the latter means Incorporated, i.e. which represents the form of corporation, such as S corp or C corp. Let’s take a glance at the article provided to you to know the difference between LLC and Inc.

Content: LLC Vs Inc.

1. Comparison Chart
2. Definition
3. Key Differences
4. Similarities
5. Conclusion

Comparison Chart

Basis for Comparison	LLC	Inc.
Meaning	A Limited Liability Company or LLC is a private company, that merges the features of a corporation and a partnership firm.	Inc. is an abbreviation for Incorporated, used as a suffix in the name of corporations, indicating a business entity registered under law.
Owners	Members	Shareholders
Trading	Private	Public
Flexibility	More	Comparatively less
Legal formalities and record keeping	Less	Comparatively more
Taxation	Pass-through taxation	Double taxation
Annual General Meeting	Optional	Compulsory
Annual report	Not necessary	Must be filed with the appropriate authority.
Approprite for	Small entities	Large entities

Definition of LLC

LLC expands to Limited Liability Company, is a privately held company, with minimal legal formalities. It is a unique form of business which combines the features of partnership and corporation, i.e. flow-through income taxation and limited liability respectively.
The business form can have an unlimited number of owners. The profits earned or losses suffered are reported by the business owners on their individual tax return. It provides legal protection for the personal property of the owners, from business debts and obligations. LLC do not have to follow a lot of legal requirement, such as organise meetings, maintain minutes, record resolutions taken by the company, etc.
An LLC cannot issue shares to the public, so as to raise funds from the market. Further, the rules in connection with the LLC may differ from country to country, due to the absence of uniformity. Self-employment tax should be paid on the income of the LLC.

Definition of Inc.

Inc. expands to Incorporation, which implies the legal process of forming a corporation. Generally, the term Inc. is added at the end of the name by the corporations which are incorporated. Corporation is an artificial person, a separate legal entity which is treated independently of its members, having its own rights and obligations, limited liability, perpetual succession, holds property in its own name.
Organisations such as for-profit, non-profit, sports club, public or private are operated around the world as corporations. As per US law, for tax purposes, a corporation can be S Corp or C Corp.
The formation of an Inc. requires submission of articles/certificate of incorporation, which highlights various matters such as objective, location, number & type of stock. The name of the corporation is divided into three parts, i.e. distinctive element, descriptive element and a legal ending, where the distinctive element and legal ending are a must for all the corporations.

Key Differences Between LLC and Inc.

The difference between LLC and Inc. can be drawn clearly on the following grounds:

1. A private company, which merges the features of a corporation and a partnership firm, is called LLC or Limited Liability Company. Inc. is an acronym for Incorporated, used as a suffix in the name of corporations, denoting a business entity registered under the law.
2. The owners of the LLC are the members, whereas shareholders are the ultimate owner of an Inc.
3. An LLC is a privately held corporation, but an Inc. is a publicly traded corporation.
4. LLC offer greater flexibility than Inc., i.e. there is no bar on the maximum number of members in an LLC, but an S Corp. can have only 100 members.
5. The Inc. (Corporation) is subject to stringent legal formalities and record keeping. However, when it comes to LLC the legal formalities and record keeping is lenient.
6. The best feature of LLC is pass through taxation, i.e. the income of the LLC is taxable in the hands of its owners after it is distributed to them. On the contrary, Inc. have to face double taxation, first at the corporate level and next at individual level, when the profit is distributed to shareholders as the dividend.
7. The Annual General Meeting (AGM) should compulsorily be held by an Incorporated Corporation. As against this, the holding of an AGM is not required, for a Limited Liability Company.
8. The annual reports of an Inc. should be submitted to the appropriate authority within the stipulated time. Unlike LLC, wherein the filing of annual reports, with appropriate authority is not necessary.
9. For smaller entities, LLC is the best option to choose, because of fewer legalities and flexibility, while for large firms, Inc. is the right decision due to growth and profitability prospects.

Similarities

• Limited liability.
• Perpetual Succession.
• Formation requires state-level registration.
• Both in C Corp. and LLC owners need not be US citizens or residents.

Conclusion

As every coin has two sides, so with LLC and Inc. In an LLC there is no ceiling on the number of members, the business income is pass through to the member’s personal tax return. However, it cannot issue stock to raise funds from the market. On the contrary, Inc. are authorised to make the public issue and the splitting of corporate income, lessens overall tax liability, but the cascading effect is seen in the taxation of such entities.
Therefore, both are separate legal entities, which share some common traits, but the distinction arises in the ways they are owned, operated and taxed. So, consider all the factors before you come up to any of these business structures.

Know the Differences & Comparisons

Difference Between Members and Shareholders

A shareholder may or may not be the member. Similarly, a number of a member may or may not be the shareholder. The given statement is very confusing because the term shareholder and member are either used synonymously as well as interchangeably by many people.some differences between member and shareholder of a company. Here we are going to throw light on them, have a look.

Content: Member Vs Shareholder

1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion

Comparison Chart

Basis for Comparison	Member	Shareholder
Meaning	A person whose name is entered in the register of members of a company, is the registered member of the company.	The person who owns the shares of a company is known as shareholder.
Defined in	Section 2 (27)	Not defined
Share Warrant	The holder of a share warrant is not a member.	The holder of a share warrant is a shareholder.
Company	Every company must have a minimum number of members.	The company limited by shares can have shareholders.
Memorandum	The person who signs the memorandum of association with the company becomes a member.	After signing the memorandum, a person can be a shareholder only when the shares are allotted to him.

Definition of Member

A person whose name is entered in the register of members of a company becomes a member of that company. The register includes every single detail about the member like name, address, occupation, date of becoming a member, etc. It also includes every person who holds company’s shares and whose name is entered as the beneficial owners in depository records.
The liabilities of members are limited to the amount of shares held by them in the case of a company having share capital while in the case of a company limited by guarantee the liability of members is limited to the amount of guarantee given by them. But, in the case of an unlimited company the members have to contribute from his personal assets to pay the debts.
The members cannot take part in the management of the company, i.e. the management of the company is looked after by the Board of Directors. Although the right to appoint and remove the directors is in the hands of members.

How to become the member of a company

• If a person subscribes the memorandum of association of a company, he becomes a member by signing it.
• If a person becomes the beneficial owner of shares whose name is registered in the record of the depository, then also he becomes a member.
• If a person gets shares by way of transfer and the transfer is recorded by the company, along with the entry of the name of the transferee in the register of members.
• If a person gets shares by way of transmission and the transmission is recorded by the company along with the entry of the name in the register of members.
• If a person agrees to take the qualification shares of the company and pay for it then also he becomes a member of the company.

Definition of Shareholder

An individual who owns the share of a public or a private company is known as a ‘Shareholder.’ A subscriber of shares is not regarded as the shareholder until the shares are actually allotted to him.
The shareholders are the owners of the company, i.e. to the extent of the share capital held by them. The legal representative of the deceased member, is a shareholder, not the member, until and unless his name is recorded in the register of members of the company. Hence, it can be said that every shareholder is a member but every member, is not a shareholder.
The following are the rights of a shareholder:

• Right to transfer or sell their shares.
• Right to get the dividend.
• Right to attend the general meeting and vote.
• Right to take copies of Memorandum and Articles of Association.
• Right to receive the copy of the statutory report.

Key Differences Between Members and Shareholders

The following are the differences between members and shareholders:

1. A member is a person who subscribed the memorandum of the company. A shareholder is a person who owns the shares of the company.
2. The term member is defined under section 2 (27) of the Indian Companies Act, 1956. Conversely, the term shareholder is not defined in the Indian Companies Act, 1956.
3. The bearer of a share warrant is not a member, but the bearer of a share warrant can be a shareholder.
4. All shareholders whose name are entered in the register of members are the members. On the other hand, all members may not be the shareholders.
5. In the case of a public company, there must be a minimum of 7 members. There is no such cap on the maximum number of members. Similarly, a private company can have a minimum of 2 and maximum of 50 members. As opposed to shareholders, there is no minimum or maximum limit, in the case of a public company.

Conclusion

Members and Shareholders both are important persons of any company, whether it is public or a private limited company. We explained many differences between them, which makes it clear that how these two terms differentiate each other. However, a member can be a shareholder and in the same way, a  shareholder can also be a member subject to certain conditions has to be fulfilled for the same.

Difference Between Share Certificate and Share Warrant

‘Share Certificate’ is a written document, that signifies the ownership of shares of the shareholder in the company. In the same way, ‘Share Warrant’ is  also an instrument, which signifies that the holder of the instrument is entitled to the shares mentioned in it. To understand these two terms is quite difficult because they are a little ambiguous. A lot of article excerpt is already written on this topic, but, this article will help you to know the most important differences between Share Certificate and Share Warrant.

Content: Share Certificate Vs Share Warrant

1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion

Comparison Chart

Basis for Comparison	Share Certificate	Share Warrant
Meaning	A legal document that indicates the possession of the shareholder on the specified number of shares is known as share certificate.	A document which indicates that the bearer of the share warrant is entitled to the specified number of shares is share warrant.
Compulsory	Yes	No
Issued by	All the companies limited by shares irrespective of public or private.	Only public limited companies have the right to issue share warrant.
Negotiable Instrument	No	Yes
Transfer	The transfer of share certificate can be done by executing a valid transfer deed.	The transfer of share warrant can be done by mere hand delivery.
Original Issue	Yes	No
Amount paid	Issued against fully or partly paid up share.	Issued only against fully paid up shares
Approval of Central Government for issue	Not Required at all	Prior approval of Central Government is required for issuing Share Warrant.
Time Horizon for issue	Within 3 months of the allotment of shares.	No time limit prescribed.
Provision in Articles of Association	Not Required	Required

Definition of Share Certificate

A share certificate is an instrument in writing, that is a legal proof of the ownership of the number of shares stated in it. Every company, limited by shares, whether it is public or private must issue the share certificate to its shareholders except in the case where the shares are held in dematerialisation system. The share certificate contains the following details in it, they are:

• Company name
• Date of issue
• Details of the member
• Shares held
• Nominal value
• Paid up value
• Definite number.

The share certificate is issued by the company within 3 months of the allotment of shares to the applicants, which is issued under the common seal of the company. Normally, the holder of the share certificate is regarded as the member of the company.

Definition of Share Warrant

A share warrant is a negotiable instrument, issued by the public limited company only against fully paid up shares. It is also termed as a document of title because the holder of the share warrant is entitled to the number of shares mentioned in it. There is no compulsion of the issue of share warrants by the company. Although if the public company wants to issue share warrants, then previous approval of the Central Government (CG) is required, along with that the issue of a share warrant must be authorized in the articles of association of the company.
The holder of the share warrant can take a share certificate only if he surrenders the share warrant and pays the required fee for the issue of share certificate. Thereafter, the company will cancel the warrant and issue a new share certificate to him as well as the company will enter his name as the member of the company, in the register of members, after which he will become a member of the company.
Generally, the holder of the share warrant is not the member of the company, but if the articles of association of the company provide it, then the bearer is deemed to be the member of the company.

Key Differences Between Share Certificate and Share Warrant

The following are the major differences between Share Certificate and Share Warrant

1. A share certificate is the documentary evidence which proves the possession of the shares. A share warrant is the document of title which states that the holder of the instrument is entitled to the shares.
2. The issue of share certificate is compulsory for every company limited by shares but the issue of a share warrant is not compulsory for every company.
3. A Share Certificate is issued against the shares, regardless of the fact that the shares are fully paid up or partly paid up. Conversely, Share Warrant is issued by the public company only against fully paid up shares.
4. Share Certificate can be issued by both public and private companies, whereas Share Warrant is issued only by the public limited company.
5. Share Certificate is to be issued within 3 months of the allotment of shares, but there is no such time limit specified in the Companies Act for the issue of Share Warrant.
6. A share certificate is not a negotiable instrument. As opposed to share warrant, is a negotiable instrument.
7. For the issue of a share warrant, prior approval of Central Government is a must. On the other hand, Share Certificate does not require such type of approval.
8. A share certificate can be originally issued, but a share warrant cannot be issued originally.

Conclusion

After a detailed discussion on the two, it can be said that Share certificate is a more important document than a share warrant, as it signifies the ownership of the members on the indicated number of shares in the company, but a share warrant shows only