Question

Short Answer Type Questions :
Describe the privileges of private company over public company.

Answer 1

Privileges of private company over public company-

1.Number of directors : Only two directors are required in case of a private company whereas a public company requires minimum three directors.

2.Issue of prospectus : A private company does not invite the public to subscribe to its share capital. Hence, it doesn’t issue a prospectus.

3.Allotment of shares : Shares of a private company can easily be allotted without receiving a minimum subscription. However, before issuing the shares to the public at large, a public company must receive minimum subscription.