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What is the difference between a Limited company and Public sector company?


Date: 04 Mar 2016   Posted By: Bhushan     Group: Opinion About    Category: Miscellaneous   

We do have mainly two sectors of companies: Public sector company and other is a private sector company. Recently I saw a company which is neither public company nor a private company. It is a Limited company. What is the difference between a public sector company and a Limited company? Are there any benefits for the employees who work in the Limited companies similar to central government or public sector companies?
Awaiting response.


Wondering about the difference between limited and public sector company? Check out responses from experts here.


Author: Kailash Kumar    04 Mar 2016      Member Level: Platinum     Points : 2  (Rs 2)    Voting Score: 0

The Companies Act, 1956 is the concerned law. Under said Act a company has to register itself. It may a private company or a public sector company.
Government owned enterprises are known as Public Sector Undertakings (PSU). Such PSU's may be owned by Central Government or State Governments.
Private Companies are also registered under the same Act. There are Limited companies and Private Limited companies. Such companies are not owned by the Government.


Author: Venkiteswaran.    04 Mar 2016      Member Level: Diamond     Points : 5  (Rs 5)    Voting Score: 0

You need not confuse between Private limited Company and Public sector company.

Both are companies registered under Companies Act.
Public sector simply means that the majority of shares or all held by the government or it is fully owned by government.

However there is some basic difference between Private limited company and Public Limited Company. The latter is easily known just as Limited Company.

The first difference is that a private limited company will have a minimum of 2 members and a (public) limited company should have minimum 7. The maximum in the first case is 50 and there is no limit in the latter.

Similarly there are differences in the minimum paid up capital, issue of shares etc. Trading its shares in stock exchanges is only allowed for (public) limited companies.

Naturally a Public sector company is a public limited company also, but the majority share is held by government.


Author: Mahesh    04 Mar 2016      Member Level: Gold     Points : 3  (Rs 3)    Voting Score: 0

You're referring to LLP. These are the limited liability company. They have similar features to that of private limited. However they require only 2 directors, no capital in bank. And you can start and stop them without any specific audit. If you cross the turnover 50L onwards then you're forced to convert into Pvt ltd.

Each year, Pvt ltd, LLP and public limited are supposed to file the compliance document. This shows they are abiding by the act designed for specific type of company.

After certain threshold in turn over, you get the option to make your company private incorporated or public limited and open the share for the same. In such case you may find some companies choose to go public and some remain private.

You can't have Limited liability company at this stage. LLP and OPC (one person company) acts are designed for low revenue business models.


Author: Purna Prasad Sharma    05 Mar 2016      Member Level: Silver     Points : 4  (Rs 4)    Voting Score: 0


No , the company not only classified into private and public sector, actually it is classified into dirrerent types and they are on the basis of incorporation , liability , number of members , and on the basis of control.

Public and private company are classified on the basis of member.
Private company - According to section 3 (1) (111) of the company act 1956, there is a restriction of right of the members to transfer shares,maximum limitation of members to 50 excluding employees of the company and cannot invite to subscribe shares , debentures etc.

Public company - According to section 3 (1) (1V) of the company Act 1956, no restriction on transfer of shares, no limitation in maximum number of member ,can invite public to subscribe shares , debentures etc

Where as ,limited company are limited by shares or gurantee and other is unlimited company classified on the basis of liability.

Company limited by share means , the liability of the member of the company is limited , if any unpaid shares held by them.

Company limited by gurantee means the liability of the members is limited by a stipulated sum mentioned in the memorandum and member cannot be called upon to contribute further than this stipulated sum.

Unlimited company means a company does not have any limit on the liability of its member.






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