Page 7 - LILITED LIABILITY COMPANIES - INTERMEDIATE

COMPANY ACCOUNTING SESSION 14

1.4 PUBLIC AND PRIVATE COMPANIES

A public company is a company which satisfies the following conditions:

(a) its memorandum must state that it is to be a public company; and

(b) it must be registered as a public company. To obtain registration the following requirements must
be satisfied:

(i) it must have at least two members and at least two directors
(ii) its name must end with the words Public Limited Company or the abbreviation "PLC";
(iii) it must have an authorised share capital of at least € 46,587.47.

A public company may offer its shares to the public and its shares will be traded on the Stock Exchange.
Public companies may secure a stock exchange quotation for their shares and/or debentures, inviting the
public to subscribe by the issue of a prospectus. They are then referred to as quoted companies or listed
companies. However, it is not obligatory for the securities of a public company to be quoted on a stock
exchange.

A private company is a company which satisfies the following conditions:

(a) its memorandum must state that

(i) it is a private company;
(ii) it restricts the right to transfer its shares;
(iii) limits the number of its members to fifty;
(iv) prohibits any invitation to the public to subscribe for any shares or debentures of the company;
and

(b) it must be registered as a private company. To obtain registration the following requirements must
be satisfied:

(i) it must have at least two members and at least one director;
(ii) its name must end with the words Private Limited Company or the word "Limited" or its
abbreviation "Ltd";
(iii) it must have an authorised share capital of at least € 1,164.69.

Private companies are prohibited from inviting the public to subscribe for their shares or debentures.

©LAWRENCE CAUCHI AIPFM, LMLCC, FIAB, MAAT, MIAAP. Page 6 of 19