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Difference Between Limited Company & Public Limited Company

Updated February 21, 2017

The difference between a private limited company and public limited company relates mostly to size, legal formalities and the subscription of shares. Knowing the differences between the two may help you ensure that your company, whether it is private or public, is following legal and formal quorum.

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Size

A private limited company must have at least two members and no more than 50, whereas a public limited company must have at least seven members. No maximum number of members exists for public limited companies.

Private companies must have at least two directors, and a public limited company is required to have three.

Benefits

Private limited companies have fewer legal formalities to follow than a public limited company; for example, public limited companies must hold statutory meetings and file reports to the Registrar of Companies, whereas a private company does not.

Public companies can freely transfer to subscribe to shares, whereas the transfer of shares is restricted by the articles of association of a private company.

Warning

Private companies are required to use the word “Private Limited” at the end of the name, whereas “Limited” is required for public companies.

Function

A private limited company can start up the business immediately, whereas a private company is required to obtain a certificate to commence business. The public company must also collect a minimum subscription and at least 5 per cent of the nominal amount of shares applied for on the application.

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About the Author

Krista Martin has been writing professionally since 2005. She has written for magazines, newspapers and websites including Live Listings, "Homes & Living" magazine and the "Metro Newspaper." Martin holds an honors Bachelor of Arts in English from Memorial University of Newfoundland and a Master of Journalism from the University of Westminster.

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