What Is the Difference Between Private and Public Limited Companies in Virginia?
In Virginia, a private company (often structured as a closely held corporation or limited liability company) does
not offer its equity securities to the general public, while a public company is a corporation whose shares are
listed and traded on a securities exchange and must comply with extensive federal and state securities laws.
Private companies benefit from lighter regulatory oversight and can keep ownership concentrated among a small
group of investors; public companies gain access to capital markets but face rigorous disclosure, reporting,
and governance obligations under both Virginia law and the Securities and Exchange Commission. The practical
differences affect everything from how the entity raises funds to the level of public scrutiny it endures.
If you are forming, growing, or converting a business in Virginia and need guidance on the private‑versus‑public
distinction, reach Law Offices Of SRIS, P.C. at (888) 437‑7747.
Law Offices Of SRIS, P.C. – Advocacy Without Borders.
Understanding Private and Public Limited Companies in Virginia
The phrase “limited company” is not a defined term in the Virginia Code, but the concepts of a private company
and a public company are well‑recognized. In the Commonwealth, a private company is typically a corporation
that does not issue shares through a public offering, or a Virginia limited liability company (LLC) that is
privately held. Both structures allow founders and investors to retain control and avoid the substantial
compliance costs associated with public‑company status. A public company, on the other hand, is a corporation
that has registered its securities under the Securities Act of 1933 and is subject to the continuous
reporting requirements of the Securities Exchange Act of 1934, as well as Virginia’s own blue‑sky laws
administered by the Virginia State Corporation Commission (SCC).
The primary distinction therefore revolves around the ability of the entity to
solicit capital from the public at large. Private companies raise money through loans, private‑placement
offerings, or contributions from accredited investors, while public companies can access the public markets
via initial and follow‑on offerings. In exchange for that access, public companies must maintain a board
of directors with independent members, observe heightened corporate governance standards, and file periodic
reports that make their financial condition visible to investors and regulators.
Frequently Asked Questions
What is a private limited company under Virginia law?
A private company in Virginia is an entity that does not offer its securities to the general public
and is not required to register those securities with the SEC or the SCC. Most Virginia businesses
begin as private companies, often incorporated under Title 13.1 of the Virginia Code. The entity may be a
corporation with a single shareholder or a small group of investors, or an LLC whose ownership interests
are not publicly traded. Private companies enjoy fewer mandatory disclosure obligations and can craft
operating agreements or bylaws that suit their specific needs without the scrutiny that public companies face.
What is a public limited company in Virginia?
A public company in Virginia is a corporation whose shares are registered with the Securities and Exchange
Commission and are available for sale to the public, typically on a national exchange. The defining
feature is that the company has sold securities in a registered public offering or has a class of securities
that exceeds the shareholder‑number thresholds under federal law. Public companies must file annual and
quarterly reports (Forms 10‑K and 10‑Q), comply with the Sarbanes‑Oxley Act, and meet Virginia’s
securities‑registration requirements through the SCC’s Division of Securities and Retail Franchising.
Do I need to register as a “limited company” in Virginia?
No, Virginia does not have a business form called a “limited company.” The closest equivalents are a
corporation and a limited liability company. When someone refers to a “private limited company,” they
often mean a closely held corporation or an LLC. Neither entity makes you a public company automatically. A
Virginia LLC, for example, is inherently a private entity because its membership interests are not freely
transferable in the public markets. To form an LLC or a corporation, you file articles of organization or
incorporation with the SCC.
What are the main differences in reporting requirements?
Private Virginia companies face minimal public reporting; public companies must file detailed financial
statements with the SEC and often with the SCC. A private corporation or LLC files only an annual
report and pays a registration fee to the SCC. Public companies, however, are subject to the SEC’s
integrated disclosure system, which demands audited financials, management’s discussion and analysis,
and disclosure of executive compensation. Virginia securities law also requires notice filings and fees
for certain offerings, but the heaviest burden falls on public entities.
Can a Virginia LLC go public?
An LLC can become a public company only if it converts into a corporation, because LLC interests are not
typically structured for public trading. Going public usually requires an initial public offering
of shares, which is a feature of corporate stock. While some publicly traded partnerships exist, the most
common path for a Virginia LLC seeking public access is to convert to a corporation under Va. Code
§ 13.1‑722.9 or to form a corporate parent. The conversion triggers securities‑law obligations and
corporate‑governance changes.
How many shareholders can a private company have in Virginia?
There is no hard statutory maximum on the number of shareholders a private Virginia company can have,
but once the company exceeds certain federal thresholds, it may be required to register with the SEC
and become a public reporting company. For example, a corporation with more than 2,000 record
shareholders (or 500 non‑accredited investors) and assets above $10 million must register under
Section 12(g) of the Securities Exchange Act. Staying private means keeping shareholder count below
those levels and avoiding public offerings.
What are the advantages of staying private?
Private companies in Virginia enjoy lower regulatory costs, greater confidentiality, and more
flexibility in management. Owners can make strategic decisions without quarterly earnings pressure
and can keep financial information private. The SCC’s annual‑report requirement is modest, and a private
company can adopt informal governance practices. Additionally, private ownership interests are not subject
to the same liquidity and valuation scrutiny, which can be an advantage for long‑term planning.
What are the benefits of going public in Virginia?
Going public gives a Virginia company access to capital markets, enhances its ability to fund growth
through stock offerings, and can provide liquidity for early investors. Public company status can
also boost the company’s credibility with customers and vendors. However, these benefits come with
stringent compliance obligations, including SEC filings, independent audit requirements, and disclosures
under the Sarbanes‑Oxley Act, as well as Virginia securities‑law compliance.
How do I convert from a private to a public company in Virginia?
Converting a private Virginia company to a public company ordinarily involves filing a registration
statement with the SEC and applying to list shares on a national exchange. First, the company must
ensure its corporate structure—board composition, bylaws, and capital accounts—meets the exchange’s
listing standards. It must then engage an investment bank to underwrite the offering, prepare audited
financials, and submit a Form S‑1 to the SEC. The SCC’s securities division may also require notice
filings or review if the offering involves Virginia investors.
What is the role of the Virginia State Corporation Commission in public and private companies?
The SCC charters Virginia corporations and LLCs, enforces securities laws, and oversees the filing
and annual‑report requirements for all business entities formed in the Commonwealth. For public
companies, the SCC’s Division of Securities and Retail Franchising coordinates with the SEC on
registration and enforcement. For private companies, the SCC’s Clerk’s Office processes formation
documents, annual reports, and amendments, ensuring that the entity maintains good standing.
About Mr. Sris and the Firm’s Of Counsel Attorneys
Law Offices Of SRIS, P.C., founded in 1997, concentrates its practice on Virginia business‑law matters,
including entity formation, governance, and securities compliance. Mr. Sris, Owner and Founder, is a
former prosecutor who now represents Virginia entrepreneurs and established businesses across a range of
corporate and commercial matters. He is admitted in Virginia, Maryland, the District of Columbia, New Jersey,
and New York.
Mr. Sris testified before the Virginia House Courts of Justice Committee in support of 2019 HB 635 (chief
patron Del. David Bulova). Mr. Sris and the firm’s Of Counsel attorneys bring extensive combined legal
experience. Results may vary. The firm’s
Of Counsel attorneys practice in business and corporate law, providing clients with focused guidance
without the conflicts that can arise in larger general‑practice environments.
Related pages:
– Business Law Practice Area Overview
– Virginia LLC Formation Lawyer
– Virginia Corporation Attorney
– Virginia Securities Compliance Lawyer
Virginia primary sources:
– Virginia Code Title 13.1 (Corporations & LLCs)
– SCC Business Entity Filings
– Virginia Judicial System
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