Key differences between Public Limited Companies (Ltd.) and Private Limited Companies (Pvt. Ltd.)
| Feature | Public Limited Company (Ltd.) | Private Limited Company (Pvt. Ltd.) |
| Ownership | Shares are freely transferable and can be listed on stock exchanges. | Shares are not freely transferable; limited to private investors. |
| Minimum Number of Members | Requires at least 7 shareholders. | Requires at least 2 shareholders. |
| Maximum Number of Members | No limit on the number of shareholders. | Limited to 200 shareholders. |
| Minimum Directors | Must have at least 3 directors. | Must have at least 2 directors. |
| Capital Requirement | No minimum capital requirement (but must be sufficient for business needs). | No minimum capital requirement. |
| Stock Exchange Listing | Can be listed on stock exchanges (NSE, BSE) and raise capital from the public. | Cannot be listed on stock exchanges; funding is private. |
| Regulatory Compliance | More stringent, requires regular disclosure and compliance with SEBI regulations (if listed). | Comparatively fewer regulations and compliance requirements. |
| Public Fundraising | Can issue shares to the general public through IPOs (Initial Public Offerings). | Cannot issue shares to the public; funding is from private investors. |
| Audit & Reporting | Mandatory audits and public disclosures, including financial statements. | Audit is mandatory, but financial statements are not publicly disclosed. |
| Control & Decision Making | Decision-making is influenced by public shareholders. | Decision-making remains with the private owners, ensuring better control. |
Conclusion
A Public Ltd. company is best for businesses that want to raise money from the public and grow big, but it comes with more rules and regulations. A Private Ltd. company is better for those who want more control, fewer legal requirements, and private investments. The choice depends on how much flexibility and funding a business needs.
Suggested Read :
Checklist for Pvt Ltd Company Compliance
Enterprises vs Pvt Ltd Companies
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