In Singapore, the distinction between a private limited company (Pte Ltd.) and a public limited company (Ltd.) lies primarily in their structure, ownership, and accessibility to the public capital markets. A private limited company is a more common and flexible business structure, often preferred by small to medium-sized enterprises (SMEs). Pte Ltd. companies are restricted in their ability to transfer shares, limiting ownership to a small group of individuals, often family members, friends, or business associates. The maximum number of shareholders in a private limited company is typically capped at 50.
On the other hand, a public limited company is designed for larger enterprises seeking substantial capital from the public. These companies can list their shares on the Singapore Exchange (SGX), making them accessible to a broader range of investors. Public limited companies have fewer restrictions on the transfer of shares, allowing for more liquidity in the stock market. They must adhere to stringent regulatory requirements, including filing regular financial reports and disclosures, to ensure transparency.
While both private and public limited companies enjoy limited liability, safeguarding the personal assets of shareholders, public limited companies face more rigorous regulatory oversight due to their engagement with public investors. The decision to choose between a private or public limited company in Singapore depends on factors such as business size, growth aspirations, and the need for external funding.