Difference between Private and Public Companies 

Difference between Private and Public Companies 

  • The principal difference between public and privately held companies is that public companies have shares that can be publicly traded on a stock market. A privately held company might become a publicly held company by conducting an Initial Public Offering (IPO), which is the offering of shares of the company to the public.
  • To be a public limited company, the company’s constitution must state that the company is a public limited company.
  • A public company must obtain a trading certificate from Companies House confirming that it has the minimum allotted share capital, which must not be less than £50,000, or the prescribed equivalent in Euros.
  • A public company is prohibited from allotting shares for a consideration other than cash, unless an expert’s valuation obtained.
  • Public companies must have at least 2 directors. Private companies can however be formed by a single shareholder.
  • Private companies up to a certain size can be permitted to file abbreviated accounts with the Registrar of companies.
  • Only a private company can dispense with the formalities of holding general meetings by having a signed written resolution.
  • Public companies must appoint a company secretary; private companies do not need to – although many choose to.

 

 

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