Theory question 105
Business Organisations(a) Highlight any four differences between a public limited liability company and a private limited liability company.
(b) Explain any four advantages of a limited liability company.
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(a) Any four: public company has a minimum of 7 (or 2 under some laws) members with no maximum, private company 2 to 50; public company invites the general public to buy its shares, private company cannot; shares of a public company are freely transferable and may be quoted on the stock exchange, private company's shares are restricted; public company must publish its accounts, private company need not; public company needs a certificate of trading before starting business; public company ends with 'Plc', private with 'Ltd'; public company usually raises far more capital.
(b) Any four: limited liability of shareholders; ability to raise large capital; continuity (separate legal entity); shares are transferable; professional management; economies of scale; can sue and be sued in its own name.
Differences should be stated as matching pairs.