Public Company Vs Private Company Essay

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The different types of companies under the Companies Act 1965 which are private company and public company. There is two types of company under private company and one type of company under public company. Both companies have some various differences between the characteristics and also advantages and disadvantages. A private limited company which is also name as Ltd can be easily be started and registered by combination of two members. It is often a small business such as an independent retailer in a market. The private limited company name must end up with ‘Sendirian Berhad’ or ‘Sdn Bhd’. It can be form by two members but the number of member restrict cannot exceed above 50 members. It must have restrict the transfer of shares, as a private limited company it is not as freely to transfer the shares compare with public company, it must offer the shares to existing members of the company and the price of the shares are determine by directors. . Besides that, a private limited company cannot invite the public to subscribe for its share or to deposit money with it, it has to make its own private arrangement. It cannot be listed on stock exchange on Bursa Malaysia. The financial report of private limited company not require to send the copies account to the registrar, for example annual report,…show more content…
The restriction maximum numbers of private limited companies will affect the credit standing is lower than that of a public companies, this will affect the financial and managerial resources of a private limited companies are comparatively limited. Secondly, the lack of transferability of shares will result a shareholder cannot leave a private company easily and quickly. The poor protection to members are always occur in private limited companies, the minority members may suffer at the hands of the majority members, this dissatisfied members cannot cut off their connection with the company except at a

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