Difference Between a PLC and an LTD

• Understanding LTDs
• The scope of PLCs
• Differences in companies
• Characteristic illustrations

An LTD is an acronym for Limited Liability Company (Private Limited Company). A company is said to be a Limited Liability Company when its shareholders are only limited to contributing money in exchange for shares which will be represented by assets of the company.

The shareholders are also only limited to losing the shares they own in the company in an event of liquidation. A company can either be a Private Limited Company or a Public Limited Company.

A private limited company has the following characteristics

• A private company must have a minimum of two shareholders and a maximum of 50
• If two or more people jointly own a share of a company then they will be referred to as “One Shareholder”. Example Mr A and B known as AB contributed money to buy 10 shares in a company. Then they will both be regarded as just One shareholder AB
• Private companies by law are not allowed to invite the public to subscribe for any shares or debentures of the company and/or deposit money for fixed periods or payable at call, whether or not bearing interest
• The name of a private company limited by shares shall end with the word “Limited”

A Public Limited Company

• A Public Limited Company end with the word “Plc” at the end of its name
• A Public Limited Company can invite the public to subscribe for shares or debentures of the company provided it is listed on the floor of the Nigerian Stock Exchange
• Public Companies can therefore raise money via IPO’s or Public Offers
• Public Companies must have a minimum authorized share capital of N500,000
• A company listed on the floor of the Nigerian Stock Exchange must be a Public Limited Company but not all Public Limited Company must be listed
• Shareholders of Public Limited Companies must be a minimum of 50

[SEE: Why your “house” is not an investment]

BEWARE: This article was earlier published in 2014 and has purposefully been revamped for public education –on July 29, 2019.