What are the differences between a Public Limited Company (Plc) and a Private Limited Company (Ltd)?
Private Limited Company (Ltd): private company
Most companies in the UK are limited liability companies (Ltd). These are legally distinct entities:
- The shareholder's liability is limited to his contribution.
- Shares of private companies cannot be offered to the general public: directors are often the sole or major shareholders.
The directors have various legal obligations, including that of ensuring that an annual balance sheet and a “confirmation statement” are submitted each year to the registry.
Limited liability companies must have at least one director - and possibly a secretary.
Private companies must be incorporated with the registry. Unlike France, in most cases, standard statutes are used.
Public Limited Company (Plc): public company
Public limited companies (Plc) are similar to limited liability companies; they are legally separate entities with their own assets and liabilities:
- The shares of a public company can be sold and traded freely to the general public.
- These shares may be listed on a stock exchange.
Public limited companies are the only type of company allowed to raise capital from this type of public investment.
They must have a minimum share capital of £50,000 (of which at least 25% is fully paid up), which must be mentioned in the certificate of commencement of activity obtained from the registry.
Public limited companies must have at least two directors - but also a qualified company secretary.
Public limited companies must also be registered with the registry and be incorporated (that is to say by adopting articles of association and a protocol of association).
The main differences
The main differences between limited liability companies (Ltd) and public limited companies (Plc) are as follows:
- Public companies may offer their shares for sale to the general public.
- Two directors are required for public companies while only one is required for a private company.
- State-owned enterprises cannot buy their own equity shares.
- Public enterprises must appoint a suitably qualified company secretary.
- Public companies have 6 months to submit their annual accounts, compared to 9 months for private companies.
- Public companies are required to hold an annual general meeting while this is generally not a requirement for private companies.