What is the difference between private limited company and a public limited company?

Answer 1

The difference between public and private company can be drawn clearly on the following grounds:

• A public company refers to a company that is listed on a recognized stock exchange and traded publicly. A Private Ltd. company is one that is not listed on a stock exchange and is held privately by the members.

• There must be at least seven members to start a public company. As against this, the private company can be started with minimum two members.

• The is no ceiling on the maximum number of members in a public company. Conversely, a private company can have a maximum of 200 members, subject to certain conditions.

• A public company should have at least three directors whereas the Private Ltd. company can have a minimum of 2 directors.

• It is compulsory to call a statutory general meeting of members, in the case of a public company, whereas there is no such compulsion in the case of a private company.

• In a Public Ltd. Company, there must be at least five members, personally present at the Annual General Meeting (AGM) for constituting the requisite quorum. On the other hand, in the case of Private Ltd. Company, that number is 2.

• The issue of prospectus/statement instead of the prospectus is mandatory in case of a public company, but this is not the case with the private company.

• To start a business, the public company needs a certificate of commencement of business after it is incorporated. In contrast, a private company can start its business just after receiving a certificate of incorporation.

• The transferability of shares of a Pvt. Ltd. company is completely restricted. On the contrary, the shareholders of a public company can freely transfer their shares.

• A public company can invite the general public for subscribing shares of the company. As opposed, a private company has no right to invite public for subscription.

Answer 2

Public limited companies have their shares listed on a stock exchange. This is not the case for the private limited company, whose shareholders are generally directors of the company, or connected to it in some way. This means that PLCs are able to raise significantly larger sums of capital than private limited companies.

A public limited company must have a minium authorised share capital of £50,000 with allotted shares of at least that value, and a minimum of two members and two directors whilst there are no miniumu capital requirements for the private limited company and the minium number of directors is just one.

Also the public limited company is subject to detailed company law requirements with regards to its shares, directors, annual general meetings, accounting and so on. For the private limited companies, there is much less red tape!

Answer 3

a private limited company is owned by friends and family that have shares in the company whereas a Public limited company , shares cant be bought from any member of the public. the owners Private limited companys can range from 5 to 55 ( it's changed i think ) whereas in Plc's There can be any amount of owners . It helps taking business studies ;)