What is the difference between Private Limited and Public Limited Companies?

Private Limited Company

Private limited company is owned privately by a small group of people such as a family. They are not allowed to offer shares (in the company) to the general public and can operate through just one director. A private limited company can not trade its shares on the stock market.

Private companies have several advantages over public companies. A private company has no requirement to publicly disclose much, if any financial information; such information could be useful to competitors. Private companies also have far less government regulations then public limited company.

Public Limited Company

Public limited company is owned publicly by a large number of investors. Public Limited companies are listed in stock market and there shares are actively traded among its investors.

Public limited companies can raise capital easily by the sale of its securities.