There are various types of company that can be formed in different jurisdictions, but the most common forms of company (generally formed by registration under applicable companies legislation) are:
§ A company limited by guarantee. Commonly used where companies are formed for non-commercial purposes, such as clubs or charities. The members guarantee the payment of certain (usually nominal) amounts if the company goes into insolvent liquidation, but otherwise they have no economic rights in relation to the company. This type of company is common in England. A company limited by guarantee may be with or without having share capital. § A company limited by shares. The most common form of company used for business ventures. Specifically, a limited company is a "company in which the liability of each shareholder is limited to the amount individually invested" with corporations being "the most common example of a limited company. This can be a public company or private company."[1] This type of company is common in England. § A company limited by guarantee with a share capital. A hybrid entity, usually used where the company is formed for non-commercial purposes, but the activities of the company are partly funded by investors who expect a return. This type of company may no longer be formed in the UK, although provisions still exist in law for them to exist.[6] § A limited-liability company. "A company—statutorily authorized in certain states—that is characterized by limited liability, management by members or managers, and limitations on ownership transfer", i.e., L.L.C.[1] Less commonly seen types of companies are:
§ Companies formed by letters patent. Most corporations by letters patent are corporations sole and not companies as the term is commonly understood today. § charter corporations. Before the passing of modern companies legislation, these were the only types of companies. Now they are relatively rare, except for very old companies that still survive (of which there are still many, particularly many British banks), or modern societies that fulfil a quasi regulatory function (for example, the Bank of England is a corporation formed by a modern charter). § Statutory Companies. Relatively rare today, certain companies have been formed by a private statute passed in the relevant jurisdiction.
Private Limited Companies (Ltd)
A private limited company is owned privately by a small group of people such as a family. A private limited company can not trade its shares on the stock market. Private limited companies can operate through just one director but it must have at least 2 shareholders.
The share capital for a private limited company has to be £50 000 or less (there is no minimum). A private limited company has to use the letters Ltd after its name so that people dealing with the company know that they are dealing with a private limited company.
Although private limited companies are usually small in size, they have to produce accounts and send them to registrar of companies annually. Furthermore unlike a sole trader, private limited companies have to pay auditors, hold meetings as stipulated in the Companies Act and share profits between all of the shareholders.
Public Limited companies (PLC)
A public limited company is able to trade on the stock market but in order to gain plc status the company must achieve the following;
Minimum share capital of £50000,
Minimum of two directors,
Its name must contain “plc” or “private limited company”
Secure a trading certificate from the Companies House
The ability to offer shares on the stock market makes it easier to raise capital; however the accounts of the company are in the public domain. All financial records, including the director's reports must be audited and available to the Registrar of Companies at the Companies House and to all who want to scrutinise them. Furthermore the company is vulnerable to take-overs as rivals have the option to purchase shares.
Ltd company is otherwise known as public limited company and pvt ltd company is a private limited company. Under public limited there are private sector company and public sector company.
The Public Sector Public sector’s organizations are budgeted and run by state. They are often called as state organizations. The primary objective of these organizations is to serve the public not to earn profit. Finances are offered freely for the uplift of society. In other words, they involve in social welfare. Organizations of public sector include educational institutes, health services, security providing organizations, national defence, financing etc.
The Private Sector
Private sector encompasses organizations with primary objective of profit earning and further divided in to two kinds:
Non-Limited CompaniesNon-limited companies do not involve complicated business concepts. There are few formalities found in this type of company, which can be set at the start of business. These formalities are opted by the selection of owner, like, be either a sole trader or start business with partners on partnership basis and the owner will be personally liable for all of the debts if the business fails. Non-limited companies are free of legal bounding. There is no legal requirement for non-limited companies to make any of their financial information public. Non-limited companies are commonly termed as "businesses".
Limited Companies Limited companies can be either privately owned when they are referred to as Limited (often abbreviated to Ltd) or publicly owned. Some publicly owned can sell shares to members of the public on the stock exchange, unlike Ltd's that cannot do in the same way. The liability for both limited and publicly owned companies is restricted. This means that incase of failure of any company, the liability of the company's shareholders is limited to the value of the shares and not to the personal funds or assets of the business owners. Or, in the case of companies limited by guarantee in which no share capital is involved, the liability of its members is limited up to a specific level that their members wish to contribute to the assets of a company in the event of it being wound up. Please note here that for limited companies, generally used term is “Company” so people automatically understand the nature of company existence. All Limited companies are legally required to submit Company Accounts and Annual Returns every year. These documents are filed at an executive agency of the Department of Trade and Industry (DTI) called Companies House. This information is available to the public. A limited company has similar rights to a person; for example it can buy assets, own property, and it can sue or be sued independently of its directors. It can have detrimental information registered against it too.
The difference between pvt ltd and public ltd company is in the no. of shareholders and transferability of shares. In pvt ltd the minimum no. of shareholders is 2 and maximum is 50 excluding the past and present employees who holds shares . Whereas in public limited the minimum no. of shareholders is 7 and there is no maximum limit.
In the case of public limited co., the shares are freely transferable but it is not so in private limited company.
Some of the strigent requirements which are applicable to public limited companies are not there in the case of private limited companies.
Public sector company is a company where the central govt or state govt or both of them combined together holds the majority of shares. But in Private sector companies the private individuals or business houses holds the majority of shares.
