What is a Private Company and Public Company?
In the Companies Act, 2013 there are different classes of companies, from which the most prominent in the corporate world are the private companies as well as the publicly traded companies. Private Company A Private Company is defined by Section 2(68) of the Companies Act, 2013. The Company's Articles of Association (AoA) restrict the transferability of its shares, and prevent the general public from subscribing to it. A Private Company differs from a Public Company mainly based on this factor. An individual company can have up to 200 members (except for a one-person company). This number does not include former employees or current employees. The law has granted several privileges and exemptions to Private Companies as they do not transfer shares freely and have limited interests of members. Public Company Public Companies are defined under Section 2(71) of the Companies Act, 2013. They sell all or part of themselves in an initial public offering to the public. They are not Priv...