Difference between Private Limited (Sdn Bhd) v Public Limited (Berhad) PDF

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Difference between Private Limited (Sdn Bhd) v Public Limited (Berhad) Private Limited (Sdn Bhd)

Since public companies have to publicly disclose their financials, a higher financial reporting standard is usually expected from them.

can only have a maximum of 50 shareholders

public companies (Bhd) can have an unlimited amount of shareholders.

Not required to disclose to public

Public companies (Bhd) are required to make their financial information publicly available for the public to access. If they are a public listed company, they would also be required to hold quarterly earning calls and answer any questions that their public shareholders might have for them. the public can freely subscribe to shares of public companies (Bhd)

#1 Financial Reporting Standards

#2 Maximum Number of Shareholders #3 Publicly Available Financial Information

#4 Publicly Available Shares Reasons for Choosing Each Entity Usually, public companies are also publicly listed on a stock exchange, making them public listed companies such as Malayan Banking Group Bhd or Genting Bhd.

Public Limited (Berhad)

Not required to disclose to public

Public individuals can only own shares in a private limited company through a shareholders’ agreement with the approval of existing shareholders of the private company. Most small to medium enterprises (SMEs) will choose to incorporate as a private limited company (Sdn Bhd) once the scale and needs of their business outgrows that of a sole-proprietorship or a partnership. Reasons for doing so include the need to protect shareholders from personal liability and the need to raise funding form external investors. Sometimes, large companies would choose to remain private so that they can move faster and carry out reforms away from the scrutiny of the public eye or, in the case of family businesses, to ensure that control of the company stays within the family.

On the other hand, companies usually go public and get listed on a stock exchange either to raise further funding from public markets or so that founders and existing investors can cash in on all or part of their stakes via an initial public offering. There are many reasons why some companies choose to remain private while others choose to go public. The choice would depend on the needs of the business, company and shareholders at that particular time....