"A private company is superior to a public company” Discuss the statement in the light of privileges of a private company.
A private company enjoys certain privileges and exemptions as compared to a public
These privileges are as follows
(i) Number of Members A private company needs a minimum of two members for its incorporation as compared to seven required by a public company. This makes its formation easier.
(ii) Number of Directors A private company can have a minimum of two directors as compared to three directors in case of a public company.
(iii) Exemption from Prospectus A private company need not issue a prospectus or file a statement in lieu of prospectus with the Registrar of Companies.
(iv) No Minimum Subscription A private company can proceed with the allotment of shares without receiving the minimum subscription.
(v) Exemption from Certificate to Commence Business A private company can commepce business immediately after its incorporation as it need not procure a certificate of commencement of business from the Registrar of Companies as is required in case of a public company.
After focusing on these points it can be said that a private company is superior to public company.