## Public Company [Section 2(71)]

### Definition

A public company means a company which:

1. Is not a private company; and

2. Has a minimum paid-up share capital as may be prescribed.

### Deeming Provision (Important Proviso)

A company which is a subsidiary of a public company shall be deemed to be a public company for the purposes of this Act, even where such subsidiary company continues to be a private company in its Articles.

### Key Distinguishing Features

Feature	Public Company	Private Company
Minimum members	7	2
Maximum members	No limit	200
Transferability of shares	Free	Restricted
Invitation to public	Permitted	Prohibited
Subsidiary status of public co.	—	Deemed Public

Worked example

### Example 1

Q. XYZ Ltd. is a public company. It holds 60% of the paid-up capital of ABC Pvt. Ltd. ABC's Articles continue to contain restrictions of a private company. What is ABC's status?

A. Since ABC Pvt. Ltd. is a subsidiary of a public company (XYZ Ltd.), by virtue of the proviso to Section 2(71), ABC Pvt. Ltd. is deemed to be a public company for the purposes of the Companies Act, 2013, even though its Articles retain the restrictions of a private company.

⚠️ Common exam mistakes

Believing that a subsidiary of a public company can retain its private company status simply because of its Articles.
Confusing minimum members (7 for public, 2 for private).
Assuming all public companies must be listed — listing is not a precondition to being 'public'.

Bare-Act text Section 2(71) · Companies Act, 2013 · click to expand

'Public company' means a company which — (a) is not a private company; and (b) has a minimum paid-up share capital, as may be prescribed: Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be a public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles.

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →