Public Limited Company

Public Limited Company

public limited company

Public Limited Company- A company whose securities are sold on a stock exchange and can be ordered and sold by anyone. Public companies are strictly organized and are required by law to announce their complete and true financial position so that investors can determine the true worth of its stock (shares). Also called publicly held company.

The word Public Company defined under Section 2(71) means a company which—

(a) is not a private company;

(b) has a minimum paid-up share capital as prescribed under the Act:

Any company which is a subsidiary of Public Company shall be considered as a Public Company.

A Public Limited Company is a company having limited liability features and offers shares to the general public. The shares can be purchase by the general public through initial public offer or through buying in share market.

Characteristics of a Public Limited Company 

  1. Number of Directors:

Minimum No. of 3 Directors are required to form a public Company however, there is no limit on the maximum number of Directors under the Companies Act, 2013 to form and commence a public LTD. company.

  1. Limited Liability Company

In a Public Limited Company, the liability of all the shareholders is limited to the proportion of the amount being invested by them, it means that they are not personally liable for any loss on the part of the Company.

  1. Paid-up Share Capital

It is provided under the Act that to form a public LTD. company, paid-up share capital must be 5 lakhs or more.

  1. Prospectus

The prospectus of the public company is a comprehensive document about the affairs of the company the same is issued to the public at large as well in accordance with the Companies Law. As against this, there is no such requirement for a private company as they do not invite the general public.

  1. Name of the Public Company

It is mandatory to put the word “Limited” at the end of the name of the Public Company.

What are the Advantages of Public Limited Companies under Companies Act

Here are the advantages of a Public LTD. Company

  1. Better access to capital

It is due to the reason that a Public Company can raise money from the general public as well as from the existing shareholder.

  1. More Liquidity

There is more liquidity in share as the shareholder can buy or sell them if they are traded over the stock exchange.

  1. Recognition

Listing on stock exchange provides more public image and recognition. This also provides better opportunities for business.

  1. Expansion and Growth 

This is only due to less risk and a large corpus of money public LTD. company has better growth and expansion prospective.

How to registered Public Limited Company 

Public Limited Company has been incorporated through Form SPICe+ which has been introduced by MCA recently the same can be read at the below link. The form offers 10 consolidated services in just a single webform:

https://letscomply.com/new-process-of-registration-of-company-started-mca-introduced-featured-form-spice/

Here is a tabular representation of the incorporation of Public LTD. Company

Registration of a Public Limited Company

 

 

public limited company

What are the Documents which are required to incorporate a Public Limited Company
Signed copies of 
Proof of identity of proposed directors;
Address proof of proposed directors;
Address proof of the registered office of the company;
Director Identification Number (DIN) of all the directors, if already taken;
Memorandum of Association (MOA)
Articles of association (AOA)
POA 
Difference between a Private and Public Limited Company
The common differences between Private and Public LTD. Company are as follows:

 

Features Public Limited Company Private Limited Company
Minimum members 7 2
Minimum directors 2 2
Maximum members Unlimited 200
Invitation to public Yes No
Issue of prospectus Yes No
Minimum capital 5,00,000 1,00,000
Managerial remuneration No restriction Cannot exceed more than 11% of Net Profits

 

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