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A private limited company must have a minimum of two members while public limited company must have at least seven members?
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A private limited company must have a minimum of two members while pub...
Private Limited Company vs Public Limited Company
Definition
- A private limited company is a type of company that is privately held for small businesses. It is registered for pre-defined objectives like manufacturing, trading, etc.
- A public limited company is a type of company which is registered under the Companies Act, 2013. It has a minimum of 7 members and the shares of the company can be traded on a stock exchange.
Minimum Number of Members
- A private limited company must have a minimum of two members. These members can be individuals or corporate entities.
- A public limited company must have a minimum of seven members. These members can be individuals or corporate entities.
Ownership and Liability
- In a private limited company, ownership is restricted to the shareholders. They have limited liability and are only responsible for the amount of shares they hold.
- In a public limited company, ownership is not restricted to the shareholders. Anyone can buy or sell shares in the company. The liability of the shareholders is limited to the amount of shares they hold.
Capital
- A private limited company can raise capital through the issuance of shares to its members or through loans from banks or financial institutions.
- A public limited company can raise capital by issuing shares to the public or by issuing bonds or debentures.
Governance
- A private limited company is governed by its board of directors, who are appointed by the shareholders. The board of directors manages the day-to-day operations of the company.
- A public limited company is governed by its board of directors, who are elected by the shareholders. The board of directors is responsible for managing the company and making decisions on behalf of the shareholders.
Disclosure Requirements
- A private limited company is not required to disclose its financial statements and other information to the public.
- A public limited company is required to disclose its financial statements and other information to the public.
In conclusion, while both private limited companies and public limited companies have their own advantages and disadvantages, it is important for entrepreneurs to choose the right type of company based on their specific needs and objectives.
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A private limited company must have a minimum of two members while public limited company must have at least seven members?
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A private limited company must have a minimum of two members while public limited company must have at least seven members? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A private limited company must have a minimum of two members while public limited company must have at least seven members? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A private limited company must have a minimum of two members while public limited company must have at least seven members?.
A private limited company must have a minimum of two members while public limited company must have at least seven members? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A private limited company must have a minimum of two members while public limited company must have at least seven members? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A private limited company must have a minimum of two members while public limited company must have at least seven members?.
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