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PUBLIC LIMITED COMPANIES
These are joint stock companies which have sold shares to general public and thus have attracted public money in form of share capital. Such companies are usually quoted on the stock exchange. These companies usually raise large sums of money from the public and in order to do so, such companies must:
• Obtain permission from the capital market development authority also known as New Issue Committee.
• The company in need of public money will have to obtain permission from the NSE Council before it can be allowed to have its shares “dealt-in”.
• The law requires such a company to have a minimum of seven shareholders and there is no upper limit.
PRIVATE LIMITED COMPANIES
These are NOT allowed to advertise their shares so as to attract public money and as such they sell their shares privately (known as private placing) to interested members of the public.
Their shares are not freely transferable as these are not quoted on the stock exchange and they can only be transferred with the consent of the directors.
Differences between the two above lies on:
1. Number of shares
2. Transfer of shares
3. Methods of raising funds from the public
4. Number of directors
5. Quotation
6. AGM’s
7. Retirement age of directors.
Kavungya answered the question on March 11, 2019 at 13:14