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What’s The Difference Between PLC & LTD 

plc vs ltd

A Public Limited Company (PLC) can trade shares publicly on a stock exchange and have unlimited shareholders whereas Private Limited Companies (LTD) stay private and have limited shareholder numbers. PLCS are subject to stricter transparency rules and regulatory compliance whereas limited companies have lower costs and more privacy due to less onerous reporting obligations.

Read on for further insight about the key differences between PLC vs LTD companies. 

What Is A Public Limited Company (PLC)?

A Public Limited Company (PLC) is a type of business structure that relies on raising investment capital by selling shares publicly. The LC denotes that it is a limited company and the P shows that it’s a public company. It needs a minimum share capital of £50,000 and is legally allowed to offer its shares for sale to the general public on a stock exchange.

A PLC can have an unlimited number of shareholders but has more complex regulations and reporting rules to meet. This includes the formal publication of audited financial reports, shareholder protections and holding AGMs.

What Is A Limited Company (LTD)?

LTD is used to signify a private limited company. Limited refers to the liability status of the company which means that it’s a separate entity from its owners which means that their personal assets and cash are safe should the business fail or be in debt.

Ownership of a limited company is managed through a maximum of 50 shareholders that hold shares privately. This type of company is relatively easy to set up and is popular with entrepreneurs setting up a new business venture.

The Key Differences: PLC vs LTD

Private Limited Company (LTD)Public Limited Company (PLC)
Share trading Shares are privately held and not traded on a stock exchange.Shares are publicly traded on stock exchanges
Minimum share capital £1£50,000
No. ShareholdersMaximum of 50 allowedUnlimited numbers
Board of directors Min of 1 directorMin of 2 directors
AGMsNo AGMs neededAGMs needed for shareholder votes
Financial reporting Minimum reporting other than tax returnMust submit public reports and audited financial results
Raising capitalHarder to raise equity fundingCapital can be raised through public markets

Exploring The Differences: Share Capital & Ownership

As explained above, one of the biggest differences when it comes to PLC vs LTD is how the shares and ownership structure is organised.

Trading Shares

Private limited companies are not allowed to trade on public stock exchanges. Instead, their shares are privately held by a limited number of shareholders. This group will usually include the company founders and directors plus any additional people who have invested funds into the business.

In contrast, the main defining feature of a PLC is that its shares are available to purchase on a stock exchange. This means that anyone can buy shares in return for a capital stake in the business. The minimum share price is £50,000, so you can see how releasing shares for purchases is a quick way to raise funds for the business.

The price of the shares available will fluctuate based on the supply and demand in the stock markets and the performance of the company.

Minimum Shareholders & Share Dilution

UK corporate laws require a minimum of one shareholder to start a limited company but a public limited company needs two. There is no maximum number of shareholders imposed on PLCs but private LTDs can have a maximum of 50.

The lack of limits on PLC shareholders means that the company ownership can in theory be diluted between lots of shareholders – hundreds and millions. This creates a large collective ownership amongst a diverse spread of people and companies. In contrast, limited companies tend to have consistent share portions that aren’t diluted as much. It’s quite common to see majority shareholders in LTD companies. The division of shares directly impacts the control and decision making processes of both types of company.

Operations, Governance & Control

Annual General Meetings (AGMs) are formal gatherings of directors and shareholders that are held yearly. These are an optional thing for LTDs based on whether it’s required in their articles of association but they are a legal requirement for PLCs.

In the meetings, shareholders share the financial statements and annual reports showing the company’s performance. Shareholders are invited to vote electing directors, approving salary and bonus packages and appointing auditors.

This is also the opportunity for the leadership team to propose major business decisions or changes that would require changing articles of incorporation for shareholder approval. Overall an AGM provides a forum for discussion and review of performance and key business decisions between all key stakeholders in the business.

Reporting Needs

There is a list of important public reporting requirements for PLCs. This includes annual financial statements that must be audited by an independent external auditor. Interim financial statements must be released too. Detailed annual reports with management commentary and outlines of changes to leadership, corporate governance and risk analysis. Governance code regarding the powers between management and owners must be strictly adhered to.


Private limited companies only need one director to set up the company. But public limited companies require at least two directors as the legal minimum under UK company law.

Private companies can have very small or family-based boards, public companies need larger, more professional boards that can represent more varied viewpoints. This protects public shareholders who don’t run the company day-to-day but want prudent governance overseeing those managing the business.

The requirement for larger boards of directors in PLCS ensures that there is a good spread of financial expertise, legal skills, industry experience, or other backgrounds to guide the company’s strategy objectively.

Finance & Growth Stages

Most business owners will start their company with a LTD status due to the limited regulation required and relative ease of set up. When expansion and growth happens, it can quickly become a wise decision to move to public ownership to access a wider capital pool.

An example of this is Deliveroo who recently did just that. It grew rapidly with private investments over 8 years but then went public and secured a huge £1.77 billion in investments.

Regulations & Protections

PLC’s, as covered above, come with much bigger regulatory burdens and shareholder protections vs LTD organisations. Whether this is a good thing or not will depend on the businesses need to access public capital markets or if they can stay privately funded.

Here is an overview of the key differences on regulations and protections between the two business structures in the UK:

Regulations & Protections for Public Limited Companies (PLCs):

  • Listing Rules: Companies listed on the London Stock Exchange must follow strict rules on corporate governance, disclosure, and financial reporting. This includes rules on board composition, executive pay, auditing, and provisions to protect minority shareholders. The rules aim to ensure high standards of transparency and accountability.
  • Market Abuse Regulation (MAR): EU legislation to prevent market manipulation and insider trading. Requires timely disclosure of inside information, maintain insider lists, and take measures to prevent or detect abusive behaviours. Applies to financial instruments traded on EU regulated markets.
  • UK Corporate Governance Code: Best practice code that sets standards for board leadership, effectiveness, accountability, remuneration and relations with shareholders. PLCs must report on how they comply with the code.
  • Additional disclosure requirements: PLCs must publish audited annual reports and interim reports. Must also disclose major shareholdings, director dealings, related party transactions etc.

Exemptions for private limited companies (LTDs):

  • Lower accounting and audit requirements: Small LTDs can prepare simpler abbreviated accounts and are exempt from mandatory auditing.
  • No requirement to hold AGMs or provide detailed governance disclosures. Directors are not required to retire by rotation.
  • Shares are not publicly tradable. LTDs can choose when and how to distribute financial information.

Administrations & Running Costs

As you would expect, PLCs have much higher administration and running costs due to the need for reporting, compliance and governance overheads in comparison to the lower costs needed to set up and run LTDs.

Here is a brief overview of the key differences between the two company structures in these areas:

Public limited companies (PLCs)

  • Financial reporting – PLCs must publish full, audited accounts whereas LTDs can file abbreviated accounts. The auditing process is more rigorous and costly.
  • Regulatory compliance – PLCs must comply with listing rules, corporate governance code and MAR which requires legal/compliance expertise. LTDs have minimal regulatory burdens.
  • Shareholder communications – PLCs must hold AGMs, issue detailed annual reports to shareholders and make market announcements. This requires extra admin.
  • Board administration – PLCs require more independent directors, formal processes and sub-committees to follow governance rules. More administrative workload.
  • Professional fees – PLCs require more advice from lawyers, accountants, auditors, regulatory experts. LTDs have lower professional fees.
  • Investor Relations – PLCs need dedicated IR staff to manage communications with equity analysts, shareholders and financial media. Not needed for LTDs.

Private limited companies (LTDs)

  • Less reporting requirements – LTDs file abbreviated accounts and returns. Exempt from full auditing requirements.
  • Lower compliance burden – LTDs avoid regulatory costs of market listing rules, governance codes and investor relations.
  • Greater privacy – LTDs control information flow to shareholders. Less pressure for transparency.
  • Flexible processes – LTDs have fewer rules on board composition, AGMs and director procedures therefore have more flexibility.

Can A LTD Company Become a PLC?

Yes, a private limited company can change its business structure to become a PLC providing certain criteria are met.

  • A key reason an LTD would opt to become a PLC is to access wider capital investment options by listing publicly traded shares on a stock exchange. This allows them to finance business growth and expansion plans.
  • To qualify for PLC status, the LTD must meet the minimum share capital requirement of having £50,000 in nominal value of shares.
  • The company will need to alter its constitution by passing a special resolution to change its name and status, amending articles of association and other founding documents. These are official formal regulation steps that can’t be skipped.
  • Administrative steps also include informing all shareholders and resolving any outstanding share transfer issues. Registrars and advisors guide the process.
  • Upon satisfying all requirements, the LTD can apply for re-registration as a PLC to the Registrar of Companies along with filing the necessary documentation.
  • Once approved, the company can apply for a listing on a stock exchange. It must then comply with laws applicable to publicly traded companies regarding disclosures, governance practices and shareholder rights.
  • The transition marks a major shift into increased public transparency, regulatory standards and fundraising potential for ambitious private companies looking to power bigger growth plans through public equity investors. Expert legal and financial guidance is vital in planning and executing the move efficiently.

How To Alter A Business Constitution

If a private LTD company wants to transition to become a PLC, there is a set procedure to follow to complete the upgrade.

Review Governing Documents

To begin the shift process, the LTD would need to evaluate if its articles of association, bylaws, shareholders’ agreement and other constitution documents permit such a restructuring or not. Any restrictions around commercial activities, legal obligations, ownership shares transfers must be examined before proceeding.

Prepare and Approve Resolution

The intent has to be framed as a special resolution applying for re-registration as a PLC under UK Companies Act provisions. This must detail the name change while protecting shareholders rights. Approving 75% majority legally alters governing facets subject to regulatory consent.

Consultation Rounds

The implications must be communicated both internally and externally – amongst employees, existing shareholders and prospective investors. Addressing concerns upfront ensures smooth facilitation at voting junctures retaining stakeholder confidence.

Confirm to Formal Notice Requirements

Adequate advance intimation must be formally furnished to all shareholders and debenture holders per the statutory timelines before presentation of the resolution. This grants them reasonable opportunity for response.

Upon satisfying the internal company legislations and external compliance laws around approvals and timelines, the application can be submitted to the Registrar for completing the PLC transformation.


To recap, the key difference between PLC vs LTD is that LTDs stay private while PLCs can raise investment funds through public share ownership. Both structures are popular in the UK and will suit companies at different stages of evolution based on factors like scale, operations, reporting overhead and capital requirements at a given point.

If you’re considering transitioning from a LTD to a PLC, you should seek advice from a business advisor or financial advisor to help you to objectively ensure that it’s the right time and decision for your business.


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