Step 1: Anchor the whole distinction to a single idea — how each raises capital:
A private company raises money only from a closed, defined group (friends, family, chosen investors, capped at 200), while a public company is built to raise capital from the general public at large through the stock market/prospectus.
Step 2: Show how every other difference flows from this one idea:
Because a private company's owners are a small, known group, restricting share transfer keeps that group stable, and a low minimum of 2 members/2 directors is enough to run it. Because a public company invites the wide public, it needs a higher minimum of 7 members/3 directors for wider accountability, no ceiling on how many people can join, and free transferability so shares can be traded openly.
Step 3: Name the practical identifier:
This difference is visibly marked in the company's own name — ‘Private Limited’ for a private company versus simply ‘Limited’ for a public company.
Final Answer:
Every structural difference — member limits, director minimums, transferability, and ability to invite the public — stems from one core distinction: a private company is capital-raised privately from a capped, closed group, while a public company is capital-raised openly from the general public.