Private vs. Public Limited Company: Quick definitions
Before we explore the differences, let’s briefly recap what each structure is.
A Private Limited Company (Ltd) is a business owned privately by shareholders. Its shares are not available to the public, and ownership and control typically stay within a small group, such as founders or early investors. This structure is commonly used by small and growing businesses because it offers limited liability without the added complexity of public ownership.
For a more in-depth explanation, refer to our full guide: What is a Private Limited Company?
A Public Limited Company (PLC) is a limited company that can offer its shares to the public, often through a stock exchange. This allows businesses to raise significant amounts of capital, but it also comes with stricter regulation, higher transparency, and more demanding reporting requirements. PLCs are usually associated with large, established organisations.
You can learn more in our guide explaining what a Public Limited Company is.
What’s the difference between a Private Limited Company and a Public Limited Company?
While both structures offer limited liability, the practical differences between a Private Limited Company and a Public Limited Company are significant. They affect how the business is owned, how it raises capital, and how much information must be made public.
Here’s how the two compare at a glance.
| Private Limited Company (Ltd) | Public Limited Company (PLC) |
|---|
| | At least two shareholders |
| Shares are privately held and transfers are usually restricted | Shares can be freely bought and sold by the public |
| | £50,000 minimum share capital |
| Financial accounts are filed but less detailed | High transparency with published accounts and stricter reporting |
In simple terms, an Ltd is built for private ownership and control, while a PLC is designed for public investment and large-scale growth. Each structure comes with its own advantages and drawbacks depending on your current situation and future plans.
Next, let’s explore each structure in turn to consider when it makes most sense.
Why stay Private? The benefits of an Ltd
For most founders, remaining a Private Limited Company isn’t a limitation. It’s an intentional choice that gives you the space to grow, make decisions, and adapt without unnecessary pressure from the outside.
Here are the main advantages that come with the Ltd legal structure.
Privacy where it matters
As a Private Limited Company, your business is not subject to the same level of public scrutiny as a PLC. While basic information is filed, your financial performance is not laid out for the market to dissect in detail.
In practice, this can be a big relief. Imagine you’re running a growing consultancy or ecommerce business and experimenting with pricing, new markets, or a new product line. Some years will be stronger than others. As an Ltd, you can test and adjust without every fluctuation becoming public knowledge.
For many entrepreneurs, that privacy creates the freedom to build resilience before stepping into a more exposed structure.
Control over company decisions and direction
Private ownership also means decisions stay close to the people running the business. Shareholders are usually limited to founders, partners, or a small group of investors, which keeps governance straightforward.
This can make a real difference when priorities shift. You might decide to reinvest profits, pause expansion, or change direction altogether. As an Ltd, those calls can be made quickly, without needing to manage the expectations of a large public shareholder base.
Lower administrative burden
Compared to a PLC, an Ltd comes with fewer reporting obligations and longer filing deadlines. There is less ongoing disclosure and far less governance overhead.
In practice, that often means fewer distractions. Time spent on compliance is time not spent on customers, products, or improving how the business runs. For many founders, that simplicity is reason enough to stay private for longer.
Good to know: Even as a Private Limited Company, you still have legal filing obligations. This includes submitting annual accounts and a company tax return to HMRC. The difference is that Ltd requirements are generally lighter than those of a PLC, with longer deadlines and less public disclosure.
Why go Public? The power of a PLC
Going public with your business is a strategic move that enables you to grow and scale beyond what’s possible as a Private Limited Company. Here are the biggest advantages that come with setting up a Public Limited Company.
Access to significant capital
The defining advantage of a Public Limited Company is its ability to raise large amounts of capital by offering shares to the public, often through the London Stock Exchange.
In practical terms, this opens up funding options that are otherwise not available to private companies. Imagine you’re running a technology or manufacturing business with strong demand, but the next phase requires major investment. That might mean building new facilities, entering multiple international markets, or funding long-term research and development.
At this level, private investors or bank loans may no longer be enough. A PLC structure allows you to tap into a much broader pool of investors to support that kind of expansion.
Scale with visibility and credibility
Becoming a PLC can change how your business is perceived, especially by organisations that place a high value on structure and transparency. Public companies are required to meet stricter reporting standards, which can make it easier for others to assess how the business is run.
For example, if you’re negotiating long-term supply agreements overseas or bidding for major contracts, PLC status can reassure suppliers and partners that your business is established, well governed, and prepared to operate under closer scrutiny.
A platform for long-term growth
Public ownership can also support longevity. With shares that can be bought and sold openly, ownership can evolve over time without disrupting the business itself.
For founders and early investors, this can provide clearer exit routes. For the business, it creates a structure designed to fund growth over decades rather than years.
Ltd vs. PLC: Which is right for your business?
Choosing between an Ltd and a PLC is mostly a question of timing. The right structure depends on both what your business needs right now, and what you’re realistically building towards in the future.
A Private Limited Company (Ltd) is usually the better fit if your focus is still on refining your model, staying agile, and keeping decisions close. If you’re reinvesting profits, adjusting strategy as you go, or working with a small group of owners or investors, the privacy and flexibility of a Private Limited Company can be a real advantage.
A PLC starts to make sense when growth plans clearly outgrow private ownership. If your next phase requires significant capital from a wide investor base, and your business is already operating with formal governance in place, public ownership can unlock opportunities that aren’t otherwise available.
If you’re weighing up the two, it’s important to reflect on what’s actually driving the decision. Are you looking for steady, controlled growth, or do your plans clearly require a scale of funding that private routes cannot provide? And would public ownership genuinely support that next phase, or simply introduce complexity too early?
If the answer isn’t clear, that’s usually a sign that an Ltd is still the right fit. For most businesses, going public is not a starting point but a later milestone, reached only once scale and structure are firmly in place.
There’s also nothing stopping you from starting out as a Private Limited Company and switching to a PLC later on — a process we’ll explain briefly in the next section.
Can a private company go public?
Yes, a Private Limited Company can become a Public Limited Company through a formal process known as re-registration.
In simple terms, this means changing the company’s legal status once it meets the stricter requirements of a PLC. These include having the required share capital in place, appointing the right leadership, and meeting higher governance and reporting standards. The application is submitted to Companies House, which approves the change once all conditions are met.
Re-registration is not something most businesses rush into. It usually reflects a company that has grown significantly, built strong financial foundations, and reached a point where public investment makes strategic sense. For many founders, it’s a clear signal that the business has outgrown private ownership and is ready for its next major phase.
Importantly, this path allows businesses to grow at their own pace. Starting as an Ltd does not limit ambition. It simply gives you the flexibility to build first, then go public when the timing is right.
Good to know: Re-registering as a PLC does not automatically mean listing on a stock exchange. Many companies become PLCs first to meet structural or funding requirements, and only go on to list publicly later.
How Tide supports your limited company journey
For most businesses, the journey starts with a Private Limited Company, and Tide is built to support you from the very beginning.
If you’re setting up your first Ltd, Tide makes the process straightforward. You can register your company online, with Tide handling the formal application process with Companies House on your behalf. You’ll also get a business bank account included as part of the setup, giving you a solid, professional foundation from day one.
Once you’re up and running, Tide’s accounting and finance tools help you stay organised and compliant as your business grows. From tracking transactions to preparing for company tax returns and making sure you’re meeting deadlines and avoiding penalties under the new Making Tax Digital system, everything works together to keep your finances accurate and manageable.
As your business evolves, having strong systems in place makes every next step easier. Whether you stay private or eventually move towards a more complex structure, Tide helps support the foundations your business is built on.
Ready to get started? Set up your limited company online today with Tide.
