The provisions of the Companies Act apply to public and private companies alike. But certain provisions of the companies Act do not apply to a private company but are applicable to public companies. These may be regarded as the privileges or advantages of private company which are as under:

1. A private company may consist of two members only.

2. A private company is entitled to commence business immediately on incorporation

3. A private company may allot shares without issuing a prospectus or delivering to the Registered a statement in lieu of prospectus.


4. A private company can give financial assistance for purposes for its shares or its holding company shares.

5. A private company is not required to hold a statutory meeting or file a statutory report with the register.

6. A private company need not have more than two directors.

7. The provisions of section 81 as regards further issue of capital do not apply to a private company.


8. A private company may issue not only equity and preference shares but also deferred share or any other kind of shares.

9. Copies of balance sheet and profit and Loss Account field with the register cannot be inspected by the public.

10. A director of a private company need not hold the share qualification.

11. Restriction is regarded to overall managerial remuneration imposed by section 309 do not apply to a private company.


12. An interested director can participate in the Boards proceedings and exercise his vote.

The privileges mentioned above are not available to a private company which is a subsidiary or public company. It also applies to a private company which becomes a public company by virtue of section 43-A. Further, a private company ceases to be entitled to privileges abovementioned if, having made provisions required of a private company in its articles, The Company make a default in complying with any one of those provisions.