Proprietary limited company
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A Proprietary limited company or abbreviated as Pty. Ltd. company (sometimes Pty Ltd. or P/L) under Australian law is a business structure that has at least one shareholder with a limited number of shares. The opposite of Proprietary Limited is the Public limited company.
Under the governing Australian Corporations Act 2001 (Cth), a proprietary company must either be:
- Limited by shares (Ltd.) - Shareholders are afforded more protection when it comes to the level of liability they face for company debts.
- Unlimited - Shareholders face unlimited liability
The proprietary limited company must have at least one shareholder and must have no more than 50 non-employee shareholders and at least one director who must live in Australia with an appointed secretary that must be at least 18. One person may hold both positions of company director and secretary.
Proprietary limited companies are also classified as "large" or "small". A proprietary company is classified as small only if it meets at least two of the following criteria;
- Gross operating revenue of less than $10 million for the financial year
- Assets of less than $5 million at the end of a financial year
- Fewer than 50 employees at the end of a financial year.
Most large proprietary companies have to lodge audited accounts. Small proprietary companies only have to prepare audited financial statements if ordered to do so by ASIC or members holding five percent of voting shares, and in some cases if controlled by a foreign company.
