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

Although the PLC and the LTD share many similar characteristics, there are a few differences.  Both types of incorporated company have a separate legal personality to their owners (shareholders).  This means that, unlike sole traders and partnerships (excluding LLPs), the owners are not personally liable for the debts of the company.  

The main difference is that the shares of a public limited company can be transferred freely on the stock exchange to anyone, a private limited company cannot sell shares this way.  The accounts must be made available for public viewing.  Whereas the shares of a private limited company are usually sold to close friends or family, and must be sold with the agreement of the shareholders, unlike a PLC, where there is no need to consult the owners.  An additional requirement for a PLC is the minimum of two company directors, however, the LTD is only required to have one company director, which is usually one of the main shareholders in the company, as it is often a family-run business. The requirements for a PLC are much more formal than the LTD.

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Answered by Eilidh C. Business Studies tutor

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