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Comparison of public vs. private limited company registration in Pakistan

Comparison of public vs. private limited company registration in Pakistan

Comparison of Public vs. Private Limited Company Registration in Pakistan


Company registration is a crucial step in establishing a business entity in Pakistan. The choice between a public limited company and a private limited company registration depends on various factors, including the size of the business, the number of stakeholders involved, and the long-term goals of the company.


Public Limited Company:

A public limited company, also known as a publicly traded company, is an entity whose shares are freely traded on a stock exchange. It can offer its shares to the general public and has a minimum share capital requirement.

Private Limited Company:

A private limited company, also known as a closely held company, is a business entity with a limited number of shareholders. It cannot offer its shares to the public and has certain restrictions on share transfers.


Ownership and Governance:

Public Limited Company:

Ownership: A public limited company has a large number of shareholders, and its shares can be freely traded on a stock exchange. Ownership is dispersed among the general public, institutional investors, and promoters.
Governance: Public limited companies have a more complex governance structure due to a larger number of shareholders. The board of directors is responsible for decision-making, and shareholders exercise their influence through voting rights based on the number of shares held.

Private Limited Company:

Ownership: A private limited company has a limited number of shareholders, often consisting of family members, friends, or closely associated individuals. The transfer of shares is restricted, and ownership is relatively concentrated.
Governance: Private limited companies have a simpler governance structure with fewer shareholders. Decision-making and control are usually held by a small group of shareholders, allowing for more streamlined operations and faster decision-making processes.

Disclosure Requirements:

Public Limited Company:

Publicly traded companies have stricter disclosure requirements to ensure transparency and protect the interests of shareholders. They are required to disclose financial statements, annual reports, and other relevant information to the regulatory authorities and the public.
The Securities and Exchange Commission of Pakistan (SECP) regulates public limited companies and monitors their compliance with reporting and disclosure obligations.

Private Limited Company:

Private limited companies have fewer disclosure requirements compared to public limited companies. They are required to maintain accounting records and prepare annual financial statements, but the level of public disclosure is significantly lower.
The SECP also regulates private limited companies to ensure compliance with company law, but the reporting and disclosure requirements are relatively relaxed.


Public Limited Company:

Public limited companies have easier access to capital through the issuance of shares to the general public. They can raise funds by issuing new shares in primary markets or by selling existing shares in secondary markets, such as stock exchanges.
Public offerings allow public limited companies to attract a larger pool of investors and raise substantial capital for expansion, research and development, acquisitions, and other business activities.

Private Limited Company:

Private limited companies have limited options for raising capital compared to public limited companies. They primarily rely on private sources, such as investments from shareholders, loans from banks or financial institutions, and partnerships with other businesses.
Since private limited companies cannot offer shares to the public, their ability to raise significant capital may be restricted, particularly for larger-scale projects or expansion plans.


Public Limited Company: A prominent example of a public limited company in Pakistan is Oil and Gas Development Company Limited (OGDCL), which is listed on the Pakistan Stock Exchange and has numerous shareholders from the public.

Private Limited Company: An example of a private limited company in Pakistan is Nestlé Pakistan Limited, which is owned by a limited number of shareholders and is not listed on the stock exchange.

Case Studies:

Public Limited Company Case Study: Engro Corporation Limited

Engro Corporation Limited is a leading public limited company in Pakistan. It offers diverse products and services in sectors such as fertilizers, energy, chemicals, and food. The company went public in 2007 and listed its shares on the Pakistan Stock Exchange. The public listing provided access to substantial capital and enabled the company to expand its operations. Engro Corporation Limited’s shares are actively traded on the stock exchange, allowing investors to buy and sell them.

Private Limited Company Case Study: Packages Limited

Packages Limited is a renowned private limited company in Pakistan engaged in the packaging industry. As a closely held company, it is owned by a limited number of shareholders and not open to public investment. Packages Limited has maintained a strong presence in the market by focusing on quality products, customer satisfaction, and innovation. The private limited structure has provided the company with flexibility in decision-making and ownership control.


Choosing between public and private limited company registration in Pakistan depends on several factors, including the nature of the business, the need for capital, and the desired level of ownership control. Public limited companies offer the advantage of accessing funds from the general public through stock market listings. On the other hand, private limited companies provide more control to the existing shareholders and flexibility in decision-making. Examples of public limited companies like OGDCL and private limited companies like Nestlé Pakistan Limited showcase the diverse options available in the Pakistani business landscape.

Case studies of Engro Corporation Limited and Packages Limited highlight the benefits and considerations associated with each type of company. Engro Corporation Limited utilized the public limited structure to raise significant capital and expand its operations, while Packages Limited thrived as a private limited company by focusing on quality and innovation within a closely held ownership structure.

In conclusion, the choice between public and private limited company registration in Pakistan should be made after careful evaluation of the business requirements, long-term objectives, and stakeholder preferences. Both types of companies have their merits, and the decision should align with the specific needs and goals of the business.