What is Pty Ltd?

Pty Ltd is an abbreviation for ‘proprietary limited’. It is commonly found in company names and indicates the liability scheme adopted by a company. The other liability schemes are Ltd or ‘limited’ which means no liability scheme.

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Pty Ltd consists of two parts – ‘proprietary’ and ‘limited’. Proprietary means that the company is private, consisting only of no more than 50 non-employee shareholders. A private company does not offer its shares to the general public; therefore, it cannot list its shares in the Australian Stock Exchange.

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The second part of Pty Ltd is ‘limited’. This indicates the extent of liability that rests on the shareholders of the company. The shareholders’ legal responsibility for the liabilities of the company is limited to the value of the shares that each shareholder owns,which means that they cannot be made liable in their personal capacities. Their liability is limited to their shares to the company. Thus, a Pty Ltd company’s liabilities and obligations cannot be enforced against the personal assets of its shareholders.
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While Pty Ltd companies are limited only to 50 shareholders, there is no such limit for the number of shareholders for Ltd companies. Ltd companies can raise the company’s capital by selling their shares to the general public. They can also list their shares in the Australian Stock Exchange. Like Pty Ltd companies, shareholders of Ltd companies also have limited liability enforceable only to the extent of their shares.

Advantages of being a Pty Ltd Company

Being a Pty Ltd company does not necessarily limit a company’s size. Pty Ltd companies can operate as small-scale companies or large-scale companies. The advantage of being a Pty Ltd company is in the privacy and control that shareholders have over the company due to the limited number of shareholders allowed. Pty Ltd companies are not as strictly regulated as Ltd companies. Pty Ltd companies also have limited disclosure obligations compared to publicly listed companies.

Company Name versus Business Name

A company name is usually followed by Pty Ltd or Ltd to indicate the company’s legal liability structure. Companies are required to be registered with the ASIC.

On the other hand, a business or trading name is the name under which one chooses to conduct business. The business or trading name may be different from the registered company name and in such instance, must also be registered with the ASIC.

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How can Contracts Specialist help Pty Ltd Companies?

Whether you’re a contractor with a Pty Ltd company or an individual contractor, our construction lawyer can help you on:
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Construction Contract Review
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Payment Disputes and the adjudication process
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Fair Trading and NCAT proceedings