difference between companies

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Corporate Law

Mid Term Project Presentation on Difference of Companies

Subject: Corporate Law

MBA-4th Semester Professor: Hafiz JavedGroup Member:

Hina Shaheen Faizan AkhtarFaisal SaeedAdeel Ahmad

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Difference Between Companies Ordinance 1984

Listed and Unlisted CompanyPublic and private Company

Limited by share and limited by Guarantee

Public and Single Member CompanyPublic Company and Joint Venture

Limited by Guarantee and joint venture

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Listed vs. Unlisted Company

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Difference between Listed And Unlisted Company

Listed Company: Listed company is the company which has its shares listed on any

stock exchange.

In Pakistan at the moment companies are listed on three stock exchanges of the country namely Karachi Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange.

Example: ICI Limited, Habib Bank limited,

Unlisted Company: Unlisted Companies are those companies whose shares are not listed

on any stock exchange of the country and these type of companies are not allowed to trade their shares through stock exchange.

Example: Pakistan Steel Mill Limited.

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Listed Company A public listed company has

actually obtained subscription from the public.

A listed public company should have at least seven members.

A listed company is required to file prospectus and declaration on from 22 for obtaining certificate for commencement of business.

Unlisted Company

A public unlisted company can invite subscription from the public.

An unlisted public company should have at least three members.

An unlisted public company is required to file statement is lieu of prospectus and declaration on from 23 for obtaining certificate for commencement of business.

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Listed Company A listed public company is

required to file its accounts with the commission and the registrar.

Beneficial ownership of listed company is controlled and reported.

Minimum number of members should be seven.

Unlisted Company An unlisted public company

is required to file its accounts with the registrar only.

No such restriction on unlisted public company.

Minimum number of members should be three.

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Listed Company Quorum for a general

meeting of a listed company is ten members present is person having 25% voting power of their own account or through proxies.

A listed company prepares its accounts in accordance with fourth schedule and IASs.(International Accounting Standard)

Unlisted Company Quorum for a general

meeting of an unlisted company is two members present is person having not less than 25% voting power of their own account or through proxies.

An unlisted company prepares its accounts in accordance with fifth schedule and IASs.

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Listed Company Appointment of whole time

qualified company secretary is mandatory.

News paper publication of notice is required.

Unlisted Company Appointment of whole time

qualified company secretary is not mandatory.

News paper publication of notice is not required.

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Public vs. Private company

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Difference between Public And Private Company

Public Company: A company whose shares are publicly traded and are usually held

by a large number (hundreds or thousands) of shareholders.

The usual term is public limited company. A government owned company such as an airline or public transit company.

Example: WAPDA, Pakistan Air Line, PTCL, SNGPL,

Private Company: Business firm in the private (non-public) sector of an economy,

controlled and operated by private individuals (and not by civil servants or government employees). Used also as an alternative term for private limited company.

Example: Habib Bank, Tapal pvt Ltd,

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Public Company A public company can invite

subscription from the public.

A public company does not have restriction on transfer of share.

A public company should have at least seven members.

There is no restriction on upper limit of the members.

A public company is required to file its account with the registrar.

Private Company A private company cannot

invite subscription.

Transfer of share is restricted in a private company.

A private company should have at least two members.

Maximum members cannot exceed 50 members.

Filing of account is not required by a private company.

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Public Company Quorum for a general ,

meeting of a public company is two members present in person having not less than 25% voting power of their own account or through proxies, however, quorum in case of listed company, shall be ten members present in a person having voting power as aforesaid.

A public company is required to file statutory report.

Private Company Quorum for a general

meeting of a private company is two members is present in person having not less than 25% voting power of their own account or through proxies. However, quorum in case of SMC is presence of the sole member personally or through proxy.

A private company is not required to file statutory report.

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Public Company A public company is required

to hold a statutory meeting once in its life.

A public company is required to file prospectus or statement in lieu of prospectus for obtaining certificate for commencement of business.

A public company has to raise minimum subscription before obtaining certificate for commencement of business.

Private Company A private company is not

required to hold a statutory meeting.

There is no requirement of filing of prospectus or statement of lieu of prospectus by a private company expect when a private company convert into a public company.

There is no requirement to raise minimum subscription by a private company.

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Public Company A public company is

required to file its account with the registrar.

Auditor’s Qualification is prescribed as chartered accountant.

Beneficial ownership of listed public company is controlled and reported.

Private Company Filing of account is not

required by a private company.

No Qualification is prescribed for an auditor of a private company expect when it has paid up capital exceeding Rs. 3 million.

No reporting of beneficial ownership is required.

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Limited by Share vs. Guarantee

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Difference between limited by Share And limited by Guarantee

Company Company Limited by Share: A company in which the liability of members is limited up to face

value of their share is called company Limited by share.

Example: Habib bank Ltd, Allied Bank Ltd, Habib sugar mil, Packeges Ltd lahore

Company Limited by Guarantee: A company in which member, give a guarantee to contribute a

specific amount to the assets of company on it winding up.

Example: Karachi Stock Exchange, Lahore Stock Exchange, Islamabad Stock exchange,

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Difference between Limited by Share And Limited by Guarantee

Limited by Share Companies limited by shares

are more popular.

In case of companies limited by shares, shares are held by the shareholders of the company.

Companies limited by shares are profit making organizations.

Limited by Guarantee Companies limited by

guarantee are not so popular.

In case of company Ltd. by guarantee there is no shares, the company having members who acts as a guarantor.

Companies limited by guarantee are non-profitable organizations; they are specially designed for charitable purposes.

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Limited by Share A company limited by

shares may be divided into private and public companies.

Capital can be raised by selling shares in the company.

A company limited by shares having share capital because of issuing shares.

Limited by Guarantee A company limited by

guarantee is a public company.

Capital can be raised by issuing debentures in the company.

A company limited by guarantee having no share capital because of no issuing of shares.

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Limited by Share

In a company limited by shares, there may be different classes of shares.

A private company limited by shares is owned by its members (called shareholders). Each member’s liable for the original value of the shares they were issued but didn’t pay for.

Limited by Guarantee

It is possible to have different classes of members in a guarantee company. There may be non-voting members.

A private company limited by guarantee means the members of the company financially back it up to an agreed amount. Its members aren’t called shareholders.

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Limited by Share Companies limited by

shares can engage in legal trades and have general clauses.

Companies limited by shares have very general clauses that give them liberty to engage in any legal trade or business activity.

Limited by Guarantee There is no share capital in

case of companies limited by guarantee and it also has self imposed restrictions.

Companies limited by guarantee have specific clauses and rules dictating their areas of operation.

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Public vs. Single Member

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Public Company: A company whose shares are publicly traded and are usually held by a large

number (hundreds or thousands) of shareholders.


Example: WAPDA, Pakistan Air Line, PTCL, SNGPL,

Single Member Company: The SECP, of Pakistan introduced the concept of single member company through

amended ordinance 2002 (SMC Rule 2003) in Pakistan company ordinance 1984,

A single member company can be defined as a company with only one member, also referred to as the shareholder. A company may be formed as a single member company or may become a single member company following a share transfer whereby the number of shareholders is reduced to one.

Example: Pearl consultancy(SMC-pvt ltd.)

Difference between Public And Single Member Company

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Public Company A public company does not

have restriction on transfer of share.

A Public company is required to obtain certificate for commencement of business.

A public company has to raise minimum subscription before obtaining certificate for commencement of business.

Single Member Company

Transfer of shares is restricted and shall be at the will of single member only.

A (SMC) company is not required to obtain certificate for commencement of business and it can commence business just after its incorporation.

There is no requirement to raise minimum subscription by a (SMC) company.

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Public Company A public company has to

raise minimum subscription.

A public company is required to file prospectus or statement in lieu of prospectus for obtaining certificate for commencement of business.

Quorum for a general , meeting of a public company is two members present in person having not less than 25% voting power of their own account or through proxies.


There is no requirement to raise minimum subscription by a (SMC).

There is no requirement of filing of prospectus or statement in lieu of prospectus by a (SMC).

Quorum is one person present personally or through proxies in case of single member company.

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Public Company A public company is required

to file statutory report.

A public company is required to hold a statutory meeting once in its life.

Chief executive of company cannot engage in a competitive business.

Auditor’s Qualification is prescribed as chartered accountant.


A Single member company is not required to file statutory report.

A Single member company is not required to hold a statutory report.

No restriction is imposed on the business of a chief executive.

No Qualification is prescribed for an auditor of a single member company.

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Public Company vs. joint venture

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Public Company: A company whose shares are publicly traded and are

usually held by a large number (hundreds or thousands) of shareholders.


Example: WAPDA, Pakistan Air Line, PTCL, SNGPL, PEL,

Joint Venture: A business arrangement in which two or more parties

agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it.

Example: Honda Atlas Cars, Pak Chine Investment Company,

Difference between Public listed Company and joint venture

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Public listed Company A public listed company has

actually obtained subscription from the public.

A public company does not have restriction on transfer of shares.

A listed public company should have at least seven members.

Joint venture There is no subscription

from the joint venture parties when agreed may form a joint venture.

In case of Joint Venture, the shares of the companies are not transferrable to general public.

In case of joint Venture, there are almost two or more persons.

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Public listed Company There is no restriction on

upper limit of the members public listed company.

A public company has to seek certificate for the commencement of business.

A Public company is required to file statutory report.

Joint venture There are almost two or

more persons in the joint venture business.

There is no certificate of commencement of this business this business is established at any time.

There is no preparation of statutory report in case of joint venture.

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Public listed Company Without the permission of

the Government the Public listed company cannot be dissolved.

There is a partner in case of public listed company.

A Public listed company may be formed for short term or long term periods.

It always bears a first name.

Joint venture In case of Joint Venture, the

business is dissolved when the venture is completed.

The participants in joint venture are called as co-ventures.

It is temporary in nature and is terminated as soon as the venture is completed.

It does not need any single name to carry on the activity.

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Limited by Guarantee vs. joint venture

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Company Limited by Guarantee: A company in which member, give a guarantee to contribute a specific amount to the assets of company on it winding up.

Example: Karachi Stock Exchange, Lahore Stock Exchange, Islamabad Stock exchange,

Joint Venture: A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture, each of the participants is responsible for profits, losses and costs associated with it.

Example: Honda Atlas Cars, Pak Chine Investment Company

Difference between Company Limited by Guarantee and joint

venture

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Difference between Company Limited by Guarantee and joint venture

limited by Guarantee There is one director, a

secretary, and a declaring at the time of coming into existence.

A company limited by guarantee is non-profitable organizations.

In case of companies limited by guarantee members are called shareholders of the company.

Joint Venture In case of joint Venture,

there are almost two or more persons.

Joint Venture is a business designed for profitable purposes.

The participants in joint venture are called as co-ventures.

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Limited by Guarantee Company limited by

guarantee must be incorporated as public company, and is required to include the word “Limited” or the abbreviation “Ltd” at the end of the company’s name.

There is a compulsion of getting certificate of commencement in case of company limited by guarantee.

Joint venture There is no such restriction

in case of Joint Venture.

There is no certificate of commencement of this business this business is established at any time.

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Limited by Guarantee There is a compulsion of

statutory report in case of company limited by guarantee.

The companies limited by guarantee may be liquidated when the guarantee of the shareholders is completed.

Capital can be raised by issuing debentures.

Joint venture There is no preparation of

statutory report in case of joint venture.

In case of Joint Venture, the business is dissolved when the venture is completed.

Capital can be raised by investing money, time and effort.

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Difference between Company Limited by Guarantee and joint

ventureLimited by Guarantee

Company is established for long term and short time period until the liability of the shareholders is completed.

It always bears a first name.

Joint venture It is temporary in nature

and is terminated as soon as the venture is completed.

It does not need any single name to carry on the activity.

difference between companies

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