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March 10, 2025
Difference between government company and Public Limited Company: All you need to know
Introduction
At its core, a company is an artificial person made by law. It is a group of individuals who share a common seal, perpetual inheritance and separate legal entity. A company has a big influence on the economy of the country, whether it is a Public Limited Company or a government company. The distinctions between a government firm and a Public Limited Company are still unclear to the public. So in this blog will explain the meaning of a government firm and a Public Limited Company with the differences between them.
Government Company
A government firm is a type of company in which the federal, state, or local governments together or individually hold at least 51% of the paid-up capital. There are several government-owned businesses; a few of them are the State Trading Corporation of India, Bharat Heavy Electrical Limited, Coal India Limited, Steel Authority of India Limited and others. India’s public sector businesses are established with two primary goals in mind:
- To increase the equality of the nation’s inhabitants’ distribution of wealth and income.
- To increase the pace of the country’s development
Public Limited Company
A Public Limited Company is a company whose shares are purchased and owned by the public and that’s how the company raises its funds. It enjoys all the benefits of a legal entity with Limited Liability protection. It is registered and governed as per the provisions of the Companies Act, 2013. There is no maximum number of members/shareholders that can form a Company in India; however, there is a minimum of seven members is required.
Suggested Read – Amendments in Schedule III of the Companies Act, 2013
Difference between a Government Company and a Public Limited Company
|
Sr. No. |
Government Company |
Public Limited Company |
|
1. |
A Government firm is a company whose 51% of paid-up capital is owned by the Central Government or State Government or both jointly. |
A Public Limited Company is a company whose shares are owned by the public with a minimum paid-up share capital of Rs 5 lacs. |
|
2. |
On the advice of the comptroller and audit general of India (CAG), the auditor of the Government firm is appointed. |
However, in a Public Company, there are members who appoint the auditor of the company. |
|
3. |
In government companies, the appointment of employees is governed by MOA and AOA. |
In a Public Company, the appointment of employees is directed by the director of the company. |
|
4. |
The yearly reports and audit reports of a government firm are presented before the parliament. The state legislature is presented with the Government firm’s yearly reports if it is a state Government firm. |
The annual reports of the Public Company are presented in front of the members of the company. |
|
5. |
A Government firm is not required to provide as much information as a Public Limited Company. |
However, a Public Company is required to provide all the necessary information to the public. |
Conclusion
Both Government Company and Public Limited Company are governed by the Companies Act, 2013. The basic difference between both of them is that the Government firm is managed/owned by the governmental bodies but the Public Company is owned/managed by the public who buys the shares of the PLC.
Suggested Read :
Public Limited Company Share Capital
Challenges of Public Limited Companies
Advantages & Disadvantages of Public Limited Company
Register Public Limited Company
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