What is a Public Limited Company?
A public limited company is a business organization that operates as a separate legal entity from its owners. It is operated by shareholders.
Shares of a public limited company are listed on the stock exchange and its shares are traded in the market publicly. Shareholders of a public limited company are limited to potentially losing only the amount they have invested in shares (face value).
Advantages of Public Limited Company:
Some advantages of a public limited company are given below;
- Led by Board of Directors.
- Limited Liability.
- Number of Members.
- Transferable shares.
- Life Span.
- Financial Privacy.
- Large Capital.
- Led by Board of Directors.
- Public limited.
Examples of Public Limited Companies:
- Aisha Steel.
- Al-Ghazi Tractors.
- Allied Bank Limited.
- Amreli Steels.
- Arif Habib Corporation.
- Askari Bank.
- At-Tahur.
- Atlas Honda.
What is a Private Limited Company?
A private limited company is a small business, in which owners have liability to their shares. In this type of business, the number of shareholders is limited to 50, and shareholders can not trade their shares publicly.
Advantages of Private Limited Company:
One advantage of holding a private limited company is
1)Limited Liability that the financial liability of shareholders is limited to only their shares. Therefore, in case a private limited company faces a financial crisis, they would not risk losing their personal assets.
2) Restricted Trade of Shares
There is a restriction on the sale or transfer of shares. It is an advantage to some shareholders because shareholders who want to sell shares cannot sell them to outside buyers without consent. Shareholders must agree to the transfer of shares; therefore, the risk of competitors’ takeovers is low.
3)Continued existence is another advantage of a private limited company. If the owner dies or leaves the business it will still exist. Private limited companies are incorporated, which becomes an independent legal entity, meaning it is able to sue or own assets separate from the company owner.
4) Tax Breaks
Private limited companies also have tax advantages. For example, corporate taxes are lower than other types of businesses.
Examples of Private Limited Company:
- COCA-COLA PAKISTAN LIMITED.
- PAKISTAN PTA LIMITED .
- GUL AHMED ENERGY LIMITED.
Collective Partnership:
Collaborative partnerships are agreements and actions made by consenting organizations to share resources to achieve a mutual goal. Collaborative partnerships are participation by at least two parties who agree to share capital resources. Organizations in a collaborative partnership share the same goals. The aim of a collaborative partnership is for all parties to work together for their mutual benefit.
Corporation:
A corporation is a legal type of business that is separate from its owners. Corporations have legal rights and responsibilities; that they can sign contracts, borrow money, sue and be sued, hire employees, and give taxes.