What Is A Public Company?
A public company is one of the two main categories of companies in Australia. The other one is the proprietary (or private) company.
Whether a company is public or private will depend on how the company was initially registered with ASIC when setting up. You can quickly recognise a company as a public company if it doesn’t have the ‘Pty’ in its name (‘Pty’ stands for proprietary, or private company). For example, ‘Woolworths Group Ltd’
One of the main features of a public company is that they do not have a limit to the amount of shareholders they can have.
Public companies have a number of specific features, such as the following:
- Minimum of three directors, with two residing in Australia
- One company secretary
- An office that is accessible to the public during certain hours
Public companies also have specific reporting obligations, and are required to prepare a financial report and a director’s report annually to shareholders as well as being independently audited. Public companies are also required to hold annual general meetings.
Public companies can be listed on the Australian Securities Exchange (ASX), and the public are able to invest in public companies. Public companies have more onerous disclosure requirements than private companies due to the responsibility public companies have to the public. Public companies are regulated by ASIC, and in some cases also by APRA.
For these reasons, public companies are typically more appropriate for larger companies which do not want to be limited by the amount of shareholders they can hold (a private company is limited by 50 shareholders) and who want to be able to raise large amounts of capital through the open market. Many public companies started out as private companies and transitioned after substantial growth.
Public companies can be limited by shares, limited by guarantee, unlimited with a share capital or, in the case of the mining industry, be a no liability public company.
If you’re in the planning stage and want to know more about the best structure for your business, contact us at email@example.com or on 1800 730 617 to find out more!
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