Economy of a country is determined by the public and private sectors, both are equally important to maintain the balance of the economy. Public sectors are mostly run under government whereas private sectors run under individuals.
GDP of country is the reflection of economic growth in the country, thus it is determined by public and private sectors. Companies have shares which determine their value in the market. Deteriorating of shares means the loss of company.
Companies invest in certain things, probably the property and get profit, as the value of a particular property rises. The working of firms involves government more in public and less in private sector but somewhere there is involvement of government in both sectors.
These companies or firms are directly related with the life of common people, for example if a person is using toothpaste of a brand and the brand witness loss then they might increase the price of toothpaste, which will ultimately affect the pocket of people.
There are companies which work only for their profit and some are working to provide the best of goods and services. Almost every developing or developed country has foreign investments as well which certainly falls under the private sector but the interference and permissions of the government is important.
LTD vs PLC
The main difference between Ltd and PLC is their stake in share for buying and selling. Ltd and PLC are two types of companies among which Ltd is a private company and PLC is a public limited company. They are entirely different from each other in terms of their ownership, working, governmental interference, etc.
Comparison Table Between LTD and PLC
| Parameters of Comparison | LTD | PLC |
|---|---|---|
| Supervision | Private owner (one or many) | Government mostly |
| Transfer of share | Not easily transferred | Easily transferred |
| Shareholders | Private people | Government and general public |
| Profit | Aims their own profit | Aims for public’s profit |
What is LTD?
Ltd signifies private limited company, these types of companies are part of the private sector, their owners are either sole traders or they have partnerships of two or more people.
Ltd companies cannot quote shares in stock exchange, their shares are sold to their family members or close friends or anyone they find trustworthy, that too only when shareholders agree to it. Shares are not transferred easily.
Ltd companies are a good option for people who are looking for expansion in business that too sole traders. As adding more partners would be a good and hassle free option. It also limits the liability of business.
Ltd company is a flexible structure wherein there can be more than one owner, employees can be employed according to the will of the owner, in this sector growth of individuals is more as compared to the public sector.
These types of companies do not require high legal procedures for setup. As Ltd companies are household business their fall does not affect the public, and their motive is just their profit from their business.
Structure of Ltd companies is a fluent structure wherein the shareholders are the owners of companies. Another important position is of a director who is responsible for tax filing and all the administrative work, in general he is an employee.
The Finances of a company are different from its owner. A company’s finance is used generally for the distribution of dividend among the shareholders and the director can take an amount from the company’s finance for salaries and loans. Taxes are to be paid differently from the firm’s name and from the owner’s name.
For setting up Ltd company there should be a name of company, and office address, moreover there should be one director and at least one shareholder, paperwork is equally important and thus an agreement should be made.There should be proper listing of people who owns or who can own the company as heir should be done.
What is PLC?
PLC stands for public limited company. As the name suggests PLC works under government. These companies are considered to be part of the public sector. Shares in this type of company are transferred easily.
PLC can quote these shares in the stock exchange. They are adherents of the government and work for the public not for profit. The buying and selling of shares is done without any permission of the owner. And the government may hold most of the shares of companies which they can sell or buy anytime.
Their fall affects the public as they are directly related to government, their fall can be considered as loss of government. Working of PLC includes offering of shares to the general public and those buyers will have liability to some extent, moreover they cannot be blamed for any loss incurred by the public.
An advantage of PLC over private companies is that the shares are offered to the public which further attracts individual investors, professional traders and through mutual funds, hedge funds as well. This increases the capital of companies.
They have more potential to grow than a private company. There are more legal procedures than private which can be seen as a disadvantage for people. One disadvantage of PLC is that sometimes they are vulnerable to pressure from shareholders.
Main Differences Between LTD and PLC
- Ltd companies are run under private ownership (one individual or more than one) whereas PLC rrun under supervision of government.
- Aim of Ltd companies in their own profit from the business on contrary PLC aims for better quality of goods and service.
- Ltd companies cannot transfer their share easily whereas PLC can transfer their shares hassle free.
- Loss of Ltd companies does not affect the general public but loss of PLC adversely affects the general public.
- Ltd companies can transfer their share to their known and trustworthy people but in PLC shares are under government and the general public is offered the share in stock exchange.
Conclusion
Ltd and PLC are totally different from each other. Their working, their structure of companies is different from each other. They have their own advantages and disadvantages.