What is the difference between a public limited company and a private limited company? Answered by Eilidh C. Need help with Business Studies? One to one online tuition can be a great way to brush up on your Business Studies knowledge. Calculate the Net Profit. Both the public and private companies have their advantages and disadvantages, and an entrepreneur needs to pick one based on his plan to fund it.
As the name states, this is an entity that is held by private owners. These companies are independent and have their profits, assets, and liabilities. As it has been mentioned, the personal assets of the shareholders are safe due to the limited liability feature. They need to be incorporated by the Companies authority and need to get some legal documents before they can be formed such as the Article of Association and Memorandum of Association.
These companies are similar to the private ones in some way since they are legally independent entities with their own profits, liabilities, and assets. However, the shares of a PLC can be sold to the general public, and they can also be listed on the stock exchange. These are the only companies that are allowed to raise capital through this form of public investment.
Members: Unlike the private company, this one requires a minimum of seven members for you to form one. There is no limit the maximum number of people. Liability: The company formed is a different entity, and the shareholders enjoy limited liability. Their assets are completely safe in case of bankruptcy of bad losses. Directors Count: A board of directors leads public companies, and it should contain a minimum of three directors and a maximum of fifteen. The shareholders elect these directors during the AGM and the representatives that get elected act as the leaders of the company and help to manage it and make top decisions.
It is therefore in the best interests of the shareholders to have a bigger board for it to boost transparency. Public Transparency: Public companies are directed by the law to be very open, and they need to publish their detailed financial statements to the public every year. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. July 29, Share on Facebook Share on Twitter. Related posts. FG raises alarm over fraudulent messages on payment of N80, to Survival Fund beneficiaries October 30, Nairametrics Nairametrics is Nigeria's top business news and financial analysis website.
Comments 5. May 13, at pm. Anonymous says:.
0コメント