Q&As

What are the main differences between private limited companies and unlisted public limited companies?

read titleRead full title
Published on LexisPSL on 09/03/2018

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • What are the main differences between private limited companies and unlisted public limited companies?

It is possible to incorporate a limited company as either private or public. There are some key differences in the Companies Act 2006 (CA 2006) requirements and procedures applying to private and public (unlisted) limited companies.

The requirements of the CA 2006 for private companies limited by shares are somewhat simpler than the requirements for public companies. This is because one of the main objectives of the CA 2006 when it was drafted was to apply a ‘think small first’ approach to company regulation by applying a simple, 'light-touch' provisions for private companies (irrespective of their asset value or size), adding more restrictive provisions for public companies (whether or not they are listed) and even more stringent provisions for companies with shares that are traded on public markets. It was hoped that this method would make company law easier for small companies and their advisers to understand and comply with. For more details, see Practice Note: Companies Act 2006—history and approach to implementation.

Examples of this ‘think small first’ approach to regulation include that a private limited company:

  1. is generally not subject to the City Code on Takeovers and Mergers

Popular documents