What is the difference between a private company and a public company?

What is a difference between private linited company and public limited company ?

• Answer:

  In United Kingdom and most countries which follow British common laws traditions, Private limited company are company with less than 50 shareholders with restrictions in transfer of shares. Those companies with more than 50 shareholders with or without restriction of transfer of shares are public companies. Those companies with less than 50 shareholders but without the restriction of transfer of shares are also public companies. It is a mis-conception that public company must be big. No. There is a lot private company which is bigger than a public company in terms of turnover, number of employees and earnings. The different between a private and public company is the number of shareholders and the restrictions in the transfer of shares. A public company does not equal to a listed company. However, a listed company MUST BE A PUBLIC COMPANY as the shareholder should be more than 50 and the shares should be freely transferred. The statutory obligations (e.g. filing, disclosure of financial information, rules governing broad of directors and shareholders meeting, transfer of shares among shareholders) are different between Private and Public companies. You can go to read a text book on company law and you will get the answer in depth.