1.

Read the following case and answer the question given: Pankaj wants to start a company and asks his friend Rohit (a businessman) to explain the difference between a private and public company. Rohit told him that ‘a public company is the one which is not a private company’. Pankaj is now more confused than ever before. Suppose you are Sumit, his Chartered Accountant, state any three differences between Public and Private company, to help Pankaj in understanding the same.

Answer»
BASIS OF DIFFERENCEPUBLIC COMPANYPRIVATE COMPANY
NUMBER OF MEMBERSHas a minimum of 7 members and no limit on maximum membersHas a minimum of 2 and a maximum of 200 members, excluding the present and past employees.
RESTRICTION ON TRANSFER OF SECURITIESHas no restriction on transfer of securitiesRestricts the right of members to transfer its shares
INVITING PUBLICIs not prohibited from inviting the public to subscribe to its securitiesDoes not invite public to subscribe to its securities



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