1. Ownership and Number of Members
Private Limited Company
A Private Limited Company restricts the number of shareholders to a maximum of 200 and requires a minimum of two shareholders. Ownership is closely held, often by family members, friends, or private investors.
Public Limited Company
A Public Limited Company has no maximum limit on shareholders. It can invite the public to subscribe to shares, provided it has at least seven shareholders.
2. Share Transferability
Private Limited Company
Shares are not freely transferable. Any transfer requires the consent of the existing shareholders, which helps maintain ownership control.
Public Limited Company
Shares are freely transferable on stock exchanges, making it easier for investors to buy and sell shares.
3. Fundraising Options
Private Limited Company
Fundraising is typically limited to private sources, such as venture capital, angel investors, or loans.
Public Limited Company
A Public Limited Company can raise funds from the public by issuing shares, debentures, or bonds. It can also list its shares on stock exchanges, increasing access to capital.
4. Regulatory Compliance
Private Limited Company
Compliance requirements are less stringent, making it easier to manage and operate.
Public Limited Company
A Public Limited Company must comply with stricter regulatory norms, including disclosures to the Securities and Exchange Board of India (SEBI), filing annual reports, and maintaining transparency with shareholders.
5. Minimum Capital Requirements
Private Limited Company
There is no mandatory minimum capital requirement.
Public Limited Company
Must have a minimum paid-up capital of ₹5 lakh.
6. Disclosure and Transparency
Private Limited Company
Private Limited Companies are not obligated to disclose financial details publicly.
Public Limited Company
Transparency is a cornerstone of Public Limited Companies. They must disclose financial and operational details to the public, ensuring accountability.
At KNAP Advisory, we specialize in guiding businesses through crucial decisions like choosing the right company structure. Our expert team offers:
For more information, visit our Business Incorporation Services or contact us at info@knapadvisory.com to explore how we can help your business thrive.
Choosing between a Private Limited Company and a Public Limited Company is a pivotal decision that impacts your business's growth, control, and operational ease. With KNAP Advisory by your side, you can navigate this decision confidently and set your business up for long-term success.
Ready to take the next step? Connect with our team of experts today!
Published by KNAP Advisory | Trusted Partners in Business Growth
31 Aug, 2024
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