Theory question 106
Business OrganisationsSection B: answer three questions only from this section.
Compare and contrast the private limited company with the public limited company.
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Similarities: both are joint-stock companies registered under the Companies Act
Both have limited liability and a separate legal entity; both have continuity of existence
Both are managed by a board of directors and must file accounts
Differences: a private company has 2 to 50 members; a public company has a minimum of 7 (now 2) and no maximum
A private company cannot invite the public to buy its shares; a public company can sell shares to the public and be quoted on the Stock Exchange
Shares of a private company are not freely transferable; those of a public company are freely transferable
A private company usually has smaller capital; a public company can raise very large capital
A private company need not publish its accounts to the public; a public company must publish audited accounts
A private company uses 'Ltd' after its name; a public company uses 'Plc'
Give both similarities and differences; a table of differences is acceptable.