In a private company limited by shares, its disclosures requirements are more relaxed and lighter than others. This is because, its shares are not offered to the general public, and they may not be traded in a public stock exchange. This is supposed to be the main difference between a public and a private company limited by shares. It is notices that mostly small sized companies are private in nature.

In a private company limited by guarantee, there are no shareholders, but guarantors. They are mostly companies that are non profit in nature and require a legal personality. The guarantors take the responsibility of contributing a nominal amount in case the company comes to the situation of winding up. Such a company cannot distribute its profits amongst members, and hence can apply for the status of a charitable concern if necessary.

In a public limited company, the members take some or all the shares when the company is being registered. The Memorandum of association must include the names of the people taking the shares, and the percentage of shares taken by each. The shares of this company are open for public issue.

If a company limited by shares were to become insolvent, the shareholders will only have to pay the amount that is left unpaid on their shares. Usually the payment is nil, because shares are usually issued fully paid. The money paid here refers to amount paid to the company on the first issue of the shares. It must not be confused with the payments during ownership transfer of shares.

To form a company, one has to submit documents like the Memorandum of Association, Articles of Association, Form 10 and 12 to the Companies House.