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Could you please mention the difference between public company and private company; and what is the principle difference between them?
And please let me know do they both have thr same rights and ways when it comes to issuing the shares in the market?
Let’s get rid of private companies first. By statutory definition, a company is a private company if it isn’t a public company. So it’s the default category! If a company doesn’t satisfy the definition criteria as a public company, then it’s a private company.
OK so far?
Now, a UK public company is statutorily defined in Companies Act 2006.
– a public company is a company whose certificate of incorporation states that it is a public company.
– it must have a minimum allotted share capital of £50,000, of which at least 25% is credited as paid up.
– the name of the company must end with the words “public limited company” or “plc”.
– public companies are subject to more stringent regulations than private companies
OK ?
And you ask ‘And please let me know do they both have the same rights and ways when it comes to issuing the shares in the market?’
Very simply … NO! Why? Because a private company is prevented by law from inviting the public to subscribe for share and debentures. Therefore, private companies CANNOT issue shares ‘on the market’
Again, OK?
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