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Private and public limited companies

IB Business Management • Unit 1

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🔒 Private Limited Companies (Ltd)

Big Idea: A private limited company sells shares privately to selected people. Shares cannot be bought on a public stock exchange.

Key features

Owned by shareholders with limited liability
Shares sold privately to family, friends or investors
Separate legal identity from owners
Shareholders’ personal assets are protected
Legal continuity — company continues if owners change

📈 Public Limited Companies (PLC)

Big Idea: A public limited company sells shares on a stock exchange where anyone can buy them.

Key features

Shares traded on a public stock exchange
Anyone can buy shares
Limited liability for shareholders
Separate legal identity
Must publish financial accounts
Risk of hostile takeover

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the term limited liability. [2 marks]

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1.1.1Nature of businesses

1.1.2Business functions

1.1.3Primary, secondary, tertiary, and quaternary sectors

1.1.4Process of starting a business

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