Here are some of the key distinctions between private and public companies in Singapore:
- Ownership and Shareholders: A private company has a limited number of shareholders (maximum 50), whereas a public company can have an unlimited number of shareholders. Private companies often have a more concentrated ownership structure, with shares held by a small group of individuals or entities.
- Capital Raising: Public companies can raise capital from the general public by issuing shares through an initial public offering (IPO) on a stock exchange. In contrast, private companies typically raise funds through private investments or loans from individuals, venture capitalists, or banks.
- Disclosure Requirements: Public companies have more stringent disclosure requirements compared to private companies. They are required to publish their financial statements and other relevant information to ensure transparency for investors. Private companies have fewer reporting obligations and can maintain confidentiality.
- Transferability of Shares: Shares of public companies are generally freely transferable, allowing shareholders to easily buy or sell their shares on the stock exchange. On the other hand, shares of private companies are often subject to restrictions on transfer, and the process requires the consent of other shareholders or the company.
- Regulatory Framework: Public companies are subject to extensive regulations and oversight by the Accounting and Corporate Regulatory Authority (ACRA) and the Singapore Exchange (SGX). Private companies have more flexibility and fewer regulatory requirements.
It is important to note that these differences are based on general principles, and there may be additional variations based on specific circumstances or legal structures of individual companies in Singapore.