Corporate Business Forms

In any business set-up, the type of business organization chosen to start up the business plays a very important role as various taxation and other polices varies from one business form to other. Though there are various types of business forms like partnership , proprietorship available but keeping in view the advantages and disadvantage  of various business forms available, corporate business forms stands to be most credible and renowned form of business entity all over, overcoming the disadvantage and combining the advantages of other business forms.

Public Companies

Public Limited Company means a Company which is not a private limited Company and has a minimum Authorized Capital of Rs 5 Lakhs. It does not carry the word `private’ in its name and also do not have the restrictions as carried out in the private limited companies. A Private Company which is subsidiary of Public Company also functions as Public Companies.

• Minimum Authorized Capital of Rs. 5 Lakhs
• No restriction on number of members
• Shares are easily transferable.
• Can access Public in case of need of funds

• Better Governed due to number of compliances
• No limit to  Memberships
• More financing options in form of Public Issue or Deposits
• Better Creditworthiness

• Number of legal Compliances are too large
• Intervention of Government
• More financing options in form of Public Issue or Deposits
• Better Creditworthiness

Private Company

Private Limited Company means a Company formed with the word ‘private’ in its name and the Articles of Association of whom contains the following restrictions:

• Restricts the right to transfer its shares
• Limitation to the number of shareholders to 50 (excluding employees and former employees)
• Prohibition towards invitation to the public to subscribe to shares and debentures
• Prohibits acceptance of deposits from persons other than shareholders, directors and their relatives.
• The minimum paid up capital for a private Company would be Rs. 100,000.

• Suitable for closely held groups
• Less Legal Formalities
• Less Government Intervention
• Better Creditworthiness

• Limited financing avenues i.e. no public offer or acceptance of deposits
• Limited Membership