Can an LLC be public or private?
An LLC is naturally a private company, not required to disclose financial information or other company details to the public. A limited liability company, or LLC, is a company that is not a separate entity for tax purposes, such as a partnership or sole proprietorship. In an LLC, profits pass through the company straight to the owners, where they are taxed for the profit and not the company.
Public vs Private LLC Ownership
The key difference between a private and public LLC is that a private LLC is owned by a limited group of people not traded publicly, while a public LLC decides to go public, listing shares on the stock exchange for purchase within the specific designations of a public LLC.
How LLCs Operate Publicly
- The LLC members must elect to be taxed as a partnership.
- The LLC operating agreement must allow assigning, transferring, and selling LLC ownership rights.
- The LLC must structure as a publicly traded partnership or PTP.
Starting an LLC and Public Limited Company
- An LLC is established via filing an “Articles of Organization” document with the Secretary of State of the state it is present in, along with its fees.
- A public limited company (PLC) is started with the help of directors (two or more) or stockholders willing to collaborate. The directors file “Articles of Association” or “Memorandum of Association” documents. The PLC is then registered and in function.