Do both private and public limited companies have limited liability?
Michael Gray
Updated on February 27, 2026
What do private and public companies have in common? Both private limited companies and PLCs are distinct legal entities. They can own assets and property, and they can be held liable for debts. Both of these business structures limit the liability of shareholders to the value of their shares.
What is the difference between public limited liability company and private limited liability company?
A public limited company is a company listed on a recognized stock exchange and the stocks are traded publicly. On the other hand, a private limited company is neither listed on the stock exchange nor are they traded. It is privately held by its members only.
Do public limited companies have limited liability?
What is a public limited company? A public limited company is a limited liability company, formed in a similar way to a private limited company under the Companies Act 2006 (‘the Act’), that has chosen to raise capital by offering its shares to the general public.
Do private companies have limited liability?
What Type Do Private Companies Have? A company as opposed to a partnership or sole trader, enjoy limited liability for their obligations. This means that the owners of companies are usually not legally responsible for the debts of their businesses.
What are the advantages and disadvantages of private limited companies?
Disadvantages
| Advantages | Disadvantages |
|---|---|
| Owner can retain control | Must be registered with the Registrar of Companies |
| More able to raise money | High set-up costs (legal and administrative) |
| Limited liability | Harder to motivate and control workers |
What’s the difference between a private and public limited liability company?
No such requirement is for a private company. The name of a Private Company limited by shares ends with Limited or LTD while a Public Company ends with Public Limited Company or PLC. The key points of differences between a Private and Public Limited Liability Company have been highlighted above.
Can a public limited company be transferred to a private limited company?
The shares of a private limited company cannot be transferred freely unlike public limited company where the shares can be transferred freely through a stock exchange. A private limited company cannot invite the public to subscribe for its shares or debentures.
What are the benefits of being a public limited company?
The demands of being a public limited company and maintaining a stock exchange listing, for example, can help to improve a company’s creditworthiness when issuing corporate debt (and therefore reduces the return the company needs to offer investors).
What are the legal requirements for a public limited company?
To help protect shareholders, the legal and regulatory requirements for a public limited company are more onerous than for private limited companies. For example, additional restrictions include: A trading certificate must be obtained from Companies House before the company can trade (there is no such requirement for a private company)
