There are a number of different types of companies that can be formed in Australia. There are only two types of proprietary companies and four types of public companies that can be registered under the Corporation Act.
The basic difference between a public and proprietary company is explained below:
Public companies are permitted by law to raise money from the public by offering their shares for sale, usually by listing them on the share market. Some public companies are not listed on the share market, but most are. You can recognise a public company because it must put the word 'Limited' or the abbreviation 'Ltd' after its name.
Public companies need only have one shareholder, but they must have three directors.
A proprietary company is usually smaller than a public company. It can have between one and 50 shareholders. Proprietary companies are not permitted to raise money by selling shares to the public (although they can convert to public company status by 'floating' their shares). You can recognise a proprietary company by the abbreviation 'Pty Ltd' that comes after its name.
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