| Bases of difference | Private company | Public company |
|---|---|---|
| Number of members | It needs at least 1 member for its formation. The maximum number can be 50. | It needs at least 7 members for its formation. The maximum number is not limited. |
| Invitation for capital | It cannot invite the public to buy its shares | It is free to invite the public to buy its shares |
| Commencement of business | It can commence the business immediately after the incorporation | It can commence the business after receiving the certificate of commencement of business. |
| Issue of prospectus | It does not need to issue prospectus | It must issue prospectus |
| Statutory meeting | It does not need to hold statutory meeting and file statutory report. | It must hold statutory meeting and file statutory report |
| Transfer of shares | The transferability of share is not allowed and hence its ownership cannot be transferred | The transferability of share is allowed and hence its ownership can be transferred |
| Use of word | It must use the word Pvt. Ltd. at the end of its name. | It must use the word Ltd. at the end of its name |
Difference between private company and public company
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