Explain the privileges which a private company has over the public company in respect of number of directors, issue of prospectus, allotment of shares and index of members

CBSE Class 11 CBSE Class 11 Business Studies
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Explain the privileges which a private company has over the public company in respect of number of directors, issue of prospectus, allotment of shares and index of members.
OR
State and explain any four privileges to a private company.

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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 j minimum subscription.
4.Index of members : There is no compulsion for a ( private company to maintain an index of members. However, it is necessary for a public company to maintain such an index.

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