Q: Difference between one person company, private company and public company ?

Ans: Section 2(62) of the Companies Act, 2013 defines a 'One Person Company' as a company which has only one person as a member. Simplifying thereof, a 'One Person Company' can be formed by only one member and one director. Importantly, the member and director can be the same person.

Section 2(68) of Companies Act, 2013 defines private companies. According to that, private companies are those companies whose articles of association restrict the transferability of shares and prevent the public at large from subscribing to them.

As per Section 2 (71) of the Companies Act, 2013, public company is a company which (a) is not a private company, (b) has minimum capital of Rs. 5 lakh or such higher paid-up capital as may be prescribed, and (c) is a private company which is a subsidiary public company.

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