Private companies are those companies whose articles of association-

1. Restricts Transferability of Shares
2. Provides minimum 2 and maximum 200 members
3. Provides Minimum 2 Directors
4. Prohibits any invitation to the public to subscribe for any securities of the company.

The private limited company has lesser number of compliances to be fulfilled and lighter disclosure to be made to the public. But, the shares of a private limited company cannot be offered to the general public, and hence cannot be traded on stock exchanges, like the public limited companies do.