Special Obligations of a Company:-

                                       In addition to the restrictions imposed on private companies as contained in section  3(1) (iii) of the Companies Act, a private company owes certain special obligations as compared to a public company, which are as follows.

                                     A Private company, while filling its annual return with the registrar of companies as required by section 159, must also send with this return a certificate starting that the company has not, Since the date of last return issued any invitation to the public to subscribe for its shares or debentures of the company and that where the annual return discloses the fact that the number of members of the company exceeds fifty, the excess comprises wholly of persons who under sub-clause (b) of clause (iii) of-sub section (1) of section 3 are not to be included in reckoning the number of fifty Pvt Registration Coimbatore.

                                      Consequenes of Infringement of the Articles of Private Companies Section 43 lays down that if a private company commits a default in complying with any of the compulsory provisions required to be contained in its articles as required under section 3(1)(iii) [as enumerated earlier], it shall cease to be a private company and the act will apply to the company as if it were not a private company.The proviso to section 43 however, states that if the infringement of any of the four conditions contained in the articles was accidental or due to inadvertence or due to some other sufficient cause, and if the company law board is satisfied that it is just and equitable to grant relief it may relieve the company on such terms and conditions as seem to the company law board just and expedient, from the above consequences, on the application of the company or of any other interested person.The consequences which will arise to a private company by infringing the minimum number of members are as under Pvt Registration Coimbatore.

(a) Section: Several liability of members: Under Section 45, the members of a private company will lose their limited liability if, in the normal circumstances, their number falls below 2 and the company carriers on business for a period of more than 6 months from the date of such reduction.

(b) Section 433(d): Company winding up: This section states that the reduction of members below 2 in the case of private company is a valid ground for compulsory winding up.

(c) section 439(4)(a): contributory’s petition: This section that a contributory may present a petition for winding up of a private company if the number falls below two.

Public Company

By virture of section 3(1)(iv), a public company means a company which

(a)  is not a private company

(b)  has a minimum paid-up capital of five lakh rupees rupees or such higher paid-up capital as may be prescribed

(c) is a private company which is a subsidiary of a company which is not a private company.

                                   A Public company may be said to be an association consisting of not less than 7 members, which is registered under the Act. In principle, any member of the public who is willing to pay the price may acquire shares in or debentures of it Pvt Registration Coimbatore.. The shares and debentures of public company may be quoted on a stock Exchange. The number of members is not limited to fifty. It may be noted that in case of a public company, the articles do not contain the restrictions provided in sections 3(1)(iii) of the Act.Every public company existing on the commencement of the companies(Amendment) Act, 2000, with a paid-up capital of less than five lakh rupees, shall within a period of two years from such commencement, enhance its paid-up capital to five lakh rupees. Where a public company fails to do so, such company shall be deemed to be a default company within the meaning of section 560 and its name shall be struck off from the register by the RegistrarPvt Registration Coimbatore.