Two Types of Companies Limited by Shares ( Private Limited Companies and Public Limited Companies ) ~ Corporate Governance

Companies limited by shares are of two types which are given below 

Private Limited Companies have the following characteristics:

1. Its shares are generally not freely transferable. Transfer of its shares has to be approved by the company and certain formalities or conditions may have to be fulfilled before the company may permit such a transfer.
2. It can have no less than two or more than fifty members excluding employees.
3. Its shares are not offered for subscription to general public.
4. The words Private Limited form part of the name of the company.

Public Limited Companies have the following characteristics:

1. Its shares are freely transferable. While the sale of shares must be notified to the company for updating its membership records, no prior permission is required for the sale or transfer of shares.
2. It can have any number of shareholders in excess of seven which is the minimum number required by the Law.
3. Its shares can be offered for public subscription upon meeting the conditions set for such issues by relevant authorities.