Suresh has done his MBA from a reputed Institution of Management and wants to incorporate a private or public company to start e-commerce business in various daily need products. Explain him the distinctions between thes

Following are the main points of distinction between a private company and a public company with specific reference to the Companies Act, 2013 1. Minimum Number of Members: In case of a private company, the minimum number of persons to form a company are two, while it is seven in the case of public company. (Section 3) 2. Maximum number of Members: In case of private company. the maximum number of members shall not exceed two hundred, whereas there is no such restriction on the maximum number of members in the case of a public company. 3. Transferability of Shares: As per section 44 of the Companies, Act, 2013, the shares of any member in a company shall be movable property and transferrable in the manner provided by the Articles of Association of the company. In a private company, by its very definition, Article of Association of a private company must contain restrictions on transferability of shares. 4. Prospectus: A private company cannot issue a prospectus, the Act prohibits any invitation to the public to subscribe for any securities of the company. while a public company may, through prospectus, invite the public to subscribe for its securities. {Section 2(68)} 5. Minimum numbers of Directors: A private company must have at least two directors on Board, whereas a public company must have at least three directors on Board. (Section 149) 6. Retirement of Directors: Directors of a private company are not required to retire by rotation, but in case of a public company at least 2/3 rd of the directors must be such whose period of office is subject to retirement by rotation. (Section 152) 7. Quorum for General Meetings: Unless the Articles of Association of the company provide for a larger number, in case of public company the quorum for general meetings shall be: five members personally present if the number of members as on the date of meeting is not more than one thousand. fifteen members personally present if the number of members as on the date of meeting is more than one thousand but up to five thousand. thirty members personally present if the number of members as on the date of the meeting exceeds five thousand. In case of a private company, unless Articles of Association provide for a higher number, two members personally present. shall be quorum for a meeting of the company.