Differences between Private and Public Limited Liability
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Below are the Differences between Private and Public Limited Liability;
| Private Limited Company: | Public Limited Company: | |
| 1. | Shares are not easily transferable, except with the consent of their members. | Shares are easily transferable. |
| 2. | Its shares are not quoted on the stock exchange. | Shares are quoted on the stock exchange. |
| 3. | It has a minimum number of two people as shareholders. | It has a minimum number of seven shareholders. |
| 4. | It has a maximum number of 50 owners. | It has no maximum number of people as owners. |
| 5. | It does not issue debentures. | It issues debentures. |
| 6. | They are not allowed to use “plc” but “Ltd” or “Unltd” | They are allowed to use the abbreviation “plc” – public liability company. |
| 7. | They do not need a certificate of trading to commence business. | They need a certificate of trading before they can commence business. |
| 8. | The public is not allowed to subscribe to its shares. | The public is allowed to subscribe to its shares. |
| 9. | It enjoys some level of privacy as it does not publicize its annual accounts. | There is no privacy as the annual account must be published. |
Evaluation Questions:
1. Explain briefly Limited Liability Companies.
2. With no less than three (3) points differentiate Private Limited Liability Companies from Public Limited Liability Companies.
3. State five advantages of public limited liability Companies.
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