An association or a legal entity formed by a group of individuals to start and manage a business is termed as a Company. A company is organized by the corporate laws of its jurisdiction.
Companies can either be a public enterprise or a private enterprise. A public enterprise is the one in which the powers are not confined to some people and resides with the public.
Key Takeaways
- LTD (Limited) companies are businesses with limited liability, and the term can refer to both privately held (PVT LTD) and publicly-held (PLC) companies.
- PVT LTD (Private Limited) companies are a type of LTD company that cannot sell shares to the general public and have restrictions on the transfer of shares, providing more privacy and control for the shareholders.
- LTD and PVT LTD companies offer limited liability protection for shareholders and separate the company’s finances from the owner’s. Still, PVT LTD companies are privately-held and have more restrictions on share ownership and transfers.
LTD vs Pvt LTD Companies
The difference between Ltd and Pvt Ltd company is that in a Limited or Ltd company the shares of the company are open to everyone that is the public owns the company whereas in the Private Limited or Pvt Ltd company the shares of the company are in the private hands, it is regulated by the private promoters or a group of promoters.
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Comparison Table
| Parameter of Comparison | LTD | Pvt LTD |
|---|---|---|
| Shareholders | In a public limited company, the shares are held by the public and are open to everyone. | In a private limited company, shares are held by the private promoters. |
| Minimum number of shareholders | A Ltd company requires at least seven shareholders in the company. | A Pvt Ltd enterprise requires at least two shareholders. |
| Maximum number of shareholders | A public Ltd company has no upper limit for the number of shareholders. | A Pvt Ltd company can have a maximum of 50 shareholders. |
| Transfer of shares | The transfer of shares in a public limited company is done through the stock market. | The shares of a private limited company are generally confined within a group of people and therefore are transferred with the approval of all shareholders. |
What is LTD Company?
Ltd. or Limited refers to a public limited company is a company in which the shares of the company are in the hands of the public. A Ltd company is open to everyone who wants to buy shares in it.
In a public Ltd company, the minimum number of shareholders must be seven while it has no limit for the maximum number of shareholders. The minimum capital requirement to start a public Ltd company is 500000.
A public limited company needs approval from the registrar of companies for the commencement of any business. It has to be transparent in its transactions and records and other activities.
A public company is listed on the stock exchange list, therefore, the transfer of shares takes place through the buying and selling in the stock market.
What is Pvt LTD Company?
Pvt Ltd or Private Limited company is a company in which the shares of the company are held only by a group of individuals. A private limited company is not open to the public.
In a private limited company, the minimum number of shareholders is two while the maximum number of shareholders is 50.
To conduct any business a private limited company does not require approval from the governmental authorities. The owner of the company is free to make decisions related to the company.
A private limited company is not necessarily listed on the stock exchange listing especially the small companies cannot opt for the stock market.
Main Differences Between LTD and Pvt LTD Companies
- The shares of a Ltd company are listed on the stock exchange where this is not a case with a Pvt ltd company.
- The transfer of shares in a Ltd company is done through the trade in stock exchange whereas in a Pvt Ltd company the shares are transferred with the approval of all shareholders.
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
