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Private limited company (ltd) and public limited company (plc) - Coggle…
Private limited company (ltd) and public limited company (plc)
Public limited company
Lead by board of directors, many shareholders
Advantages
Can raise large amount of capital selling shares to the public
Limited liability
Owners are separate legal entities from the business, therefore their personal belongings can't be taken away to repay debts if their business goes bankrupt.
No restrictions on trading shares
Banks find them less risky
Continuity
Disadvantages
Original owners mat lose control
Expensive to become public
Complicated and time consuming legal formalities.
All accounts must be made for the public to see
Difficult to control and manage
Private limited company
Disadvantages
can't sell shares to public
Legal formalities
Some accounts must be made public
Difficult ti transfer shares
Advantages
Unlimited liability
No continuity issues
raise capital of shares to selected investors.