What is the Difference Between an Public Limited Company and a Private Limited Company?
A limited company may be classified as either "private" (Pvt Ltd.) or "public" (PLC or Ltd.), and there are significant differences between the two forms.
With a Pvt Ltd, company shares may not be offered to the general public and therefore cannot be traded on a public stock exchange. In this case, the company's share holders usually consist of a close group of friends and relatives and shareholders can not transfer their shares without the consent of other investors. Typically, a Pvt Ltd must have at least two shareholders, and the maximum number of share holders is also limited (usually to around 50 individuals). One major benefit to this private business structure is that the company's disclosure requirements are less stringent than those for a public company.
The Public Ltd., on the other hand, can raise money by publicly selling shares on the stock market, and share holders of a Public Ltd. company can transfer their shares freely. Like the Pvt Ltd., the Public Ltd. must have a minimum number of share holders, but in this case the number is much higher (usually around 50 individuals) and there is no maximum limit.
In short, a Private Limited Company is a corporate version of partnership firm where as a Public Ltd. company is a full fledged corporate entity.
Any business owners who are considering a limited company structure for their ventures should be aware that each country has its own specific laws and regulations regarding the establishment of an Ltd. company and the appropriate government bodies should be consulted for more information. In most cases, a qualified professional should also be consulted.