Section

Description of the matter

3(1)(iii)

A Private Company (Pvt. Co.) can operate with Minimum paid-up capital of Rs. 1 lakh as against Rs. 5 lakhs for Public Company.

12(1)

A Pvt. Co. can be formed by only two persons as against requirement of at least seven persons in case of Public Company.

58A

Deposit taken by Pvt. Co. from members enjoys total exemption from the clutches of this section. Kindly note that as per the provisions of sec. 58A read with rule 2(b) of the Companies (Acceptance of Deposits) Rules, 1975 — amount received from its shareholders by a private company (provided the shareholder concerned furnishes at the time of giving the money to the company, a declaration that the amount is not being given out of funds acquired by him by borrowing or accepting from others) is not included in the meaning of deposit. If the depositor ceases to be a shareholder, the deposits made by him cease to qualify for exemption from the date of such cessation

70(3)

A Pvt. Co. need not file Statement in lieu of Prospectus with ROC.

77(2 & 3)

There is no restriction for Pvt. Co. which is not a subsidiary of a public company to provide financial assistance to anyone for purchasing or subscribing for its own shares or of its holding company.

81 

A Pvt. Co. can issue further shares in any manner; i.e., rights shares to the existing shareholders need not be offered.

85 to 90

The restrictions relating to kinds of share capital, issue of shares with differential voting rights, etc. do not apply to Pvt. Co.

111

Appeal against refusal to register a transfer or transmission of shares.

149

Procedures for obtaining certificate of commencement of business do not apply to Pvt. Co. A Pvt. Co. can commence its business as soon as the certificate of incorporation is issued.

165

Pvt. Co. is not required to hold statutory meeting or prepare any statutory report.

170 to 186

Relaxation in the length of Notice for calling General Meeting, contents and manner of Service of Notices, Explanatory Statements, Quorum for meeting, Chairman of meeting, Restrictions of voting rights etc. to the extent to which the company makes its own provisions by its articles..

192A

Passing of resolution by Postal Ballot not relevant for Pvt. Co.

198

Ceiling on overall managerial remuneration not applicable to Pvt. Co.

204

No restriction on appointment of any firm, body corporate to office or place of profit.

220

Inspection of P & L A/c of a Pvt. Co. by Public is not permitted.

224(1B)

Limit of appointment of Auditors are exclusive of Pvt. Cos.

252 & 252A

Minimum Directors for Pvt. Co. is 2 (two) against 3 (three) in case of Public Co. Requirement of Independent Directors or Small Shareholders’ Directors not applicable to Pvt. Co.

255

No proportion of directors to retire by rotation every year.

256

A Pvt Co. need not adopt the procedure relating to appointment, retirement, reappointment of directors etc. applicable to a public company.

257

The provision requiring the giving of 14 days notice by new candidates seeking election as directors and deposit of certain amount (Rs. 500) are not applicable to Pvt. Cos.

259

Central Government approval for increasing number of directors beyond the permissible maximum (presently 12) not required.

262

The provision relating to manner of filling casual vacancy among directors and the duration of the period of office of those so appointed do not apply to Pvt. Co.

263(1)

Appointment of two or more persons as directors by a single resolution can be done by Pvt. Co.

264

No requirement of filing consent by the directors to be filed with the Registrar to act as director.

266(5)

Restrictions on appointment of director and qualification of shares not applicable to Pvt. Co.

268, 269

Central Government approval for amendment relating to appointment/reappointment of a whole-time director/director not liable to retire by rotation.

270-273

Requirements of holding share qualification by directors and fixing the time within which the qualification is to be acquired and filing with the Registrar a declaration of his share qualification by each director is not applicable to Pvt. Co.

274(1)(g)

The prohibition against person disqualified u/s. 274(1) clause (g) does not apply to director of Pvt. Co..

275, 278

Person not to become director of more than 15 companies (Directorships of Pvt. Co. not to be counted for this limit.)

292A

Provisions relating to formation of Audit Committee not applicable.

293

Restriction in relation to certain acts on powers of Board of directors is not applicable to Pvt. Co.

295

Restriction on loans to directors/relatives etc. does not apply to Pvt. Co.

300

No restriction on interested directors from participating in the proceedings of the Board and exercising their votes.

309, 310, 311

Payment of remuneration to the directors or increase in their remuneration; Procedures like filing Form 25C not required in case of Pvt. Co.

316, 317

No restriction on period of appointment of managing director / manager for more than 5 years at a time.

349,350

Provision relating to the determination of net profits and ascertainment of depreciation shall not apply.

372A

No restrictions on giving loans or guarantees to other companies or on making investment in the shares of the other companies.

386,388

No. of companies on which a person may be appointed manager, the remuneration of a manager and the application of sections 269, 310 to 312 and 317 in relation to managers do not apply.

409(3)

Powers given to the Central Government to prevent change in the Board of directors not applicable to Pvt. Co.

416(1)

Contract by agents of the company in which the company is the undisclosed principal shall not apply.