Brief
every company is separate legal entity from the people who own or operate the company. The life of company is very stable that human beings life. There is no effect of changing, death, insolvency of respected member on company. Members liability is only limited to the extent of purchased value of shares. They have to pay balance amount of their shares.
private limited
definition
according to section 3 (1)(iii) of the companies act, 1956, private company" means a company which has a minimum paid-up capital of rs. 100, 000 or such higher paid-up capital as may be prescribed, and by its articles, -
(a) restricts the right to transfer its shares (if any);
(b) limits the number of its members to 50 not including-
(i) persons who are in the employment of the company, and
(ii) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased; and
(c) prohibits any invitation to the public to subscribe for any shares in, or debentures of, the company; and
(d) prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives.
(provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this definition, be treated as a single member)
public limited
definition
according to section 3 (1)(iv) of the companies act, 1956, "public company" means a company which-
a) is not a private company;
b) has a minimum paid-up capital of 5, 00, 000 rupees or such higher paid-up capital, as may be prescribed;
c) is a private company which is a subsidiary of a company which is not a private company.
benefits
1. separate legal entity
2. name benefit
3. great status matter of reputationbrand creation
4. limited liability of the members
5. easy admission and retirement of directors
6. company not affected by the death, disability or retirement of members
7. transferability of the shares
8. listing benefits in national stock exchange(nse) and bse (bombay stock exchange) (in case of public co. Only)
9. accept deposit or share capital from the public. (in case of public co. Only)
10. better borrowing facilities from banks and financial institutions