PUBLIC LIMITED COMPANY

A public limited company is a form of business organization that operates as a separate legal entity from its owners. It is formed and owned by shareholders. Shares of a public limited company are listed and traded at a stock exchange market freely. Shareholders of a public limited company are limited to potentially lose only the amount they have paid for the shares they own.

Public Limited Companies are companies whose shares are traded in stock market or issues fixed deposits. For Public Limited Company Registration, the company must have minimum 3 Directors, 7 Shareholders and Maximum 50 Directors and need Rs 5 Lakhs of Paid up Capital. A Public limited company have all the advantages of Private Limited Company and the ability to have any number of members, ease in transfer of shareholding and more transparency.

Advantages of Public Limited Company

1. Transferable shares

A public limited company’s shares are purchased and sold on the market. They are freely transferred among the members and the people trading on stock markets.

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2. Members:

In order for a company to be public , it should have a minimum of 7 members (maximum unlimited).

3. Uninterrupted Existence

A company has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership.

4. Limited liability

 The liability of a public company is limited. No shareholder is individually liable for the payment. The public limited company is a separate legal entity, and each shareholder is a part of it.

5. Owning Property

A company being a juristic person, can acquire, own, enjoy and alienate, property in its own name. No shareholder can make any claim upon the property of the company so long as the company is a going concern.

6. Transparency

Public limited companies are strictly regulated and are required by law to publish their complete financial statements annually to ensure the true financial position of the company is made clear to their owners (shareholders) and potential investors. This also helps to determine the market value of its shares.

7. Capital

 A public company can raise capital from the public by issuing shares through stock markets. Public companies can also raise capital by issuing bonds and debentures that are unsecured debts issued to  a company on the basis of financial performance and integrity of the company.