Jurisdiction(s):
United Kingdom

Key definition

Private company definition

What does Private company mean? In company law practice, a private company is a company owned by private shareholders or members whose securities are not offered to the public. In England and Wales, Scotland and Northern Ireland, the term is defined by the Companies Act 2006: a private company (limited by shares or by guarantee) is not a public company and, where it has a share capital, must not offer its shares or debentures to the public (section 755). Typical features include the ability to have a single director, use written resolutions and-unless the articles require-operate without a company secretary; its shares are not admitted...

US Private Company Equity Compensation: Drafting Plans, Award Types, 83(i) Deferrals, 409A, and Securities Law Compliance

Published by a LexisNexis Share Incentives expert

Practice notes

US privately held businesses frequently motivate senior leaders and other pivotal staff with Equity awards, aligning their aims with the company’s owners. While these equity arrangements often mirror public company programmes (see Practice Note: Designing a US public company equity compensation plan), important distinctions arise from the shares’ lack of liquidity. Notably, there is now a route for some award holders to postpone income tax for up to five years under US section 83(i) of the Internal Revenue Code (IRC), introduced by the 2017 tax reforms (section 83(i))...

This Practice Note is organised as follows:

Legal issues
Plan drafting
Section 83(i) eligible Plans

US tax issues

Beyond the IRC and the s 409A considerations outlined later, two key US tax topics often relevant to equity awards in private companies are tax‑favoured incentive Stock options (ISOs) and the new section 83(i) election available to certain participants under qualifying broad‑based equity plans, which is explored elsewhere in this Practice Note. ISOs are subject to particular rules and constraints...

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Web page updated on 22/05/2026

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