Under the Company Act 2013, a public limited company is one that has limited liability and sells shares to the general public.
Anyone can buy its stock, whether privately, through an initial public offering (IPO), or through stock market exchanges.
A Public Limited Company is governed by tight rules and is obligated to disclose its genuine financial condition to its shareholders.
A public limited company in India can be formed with as few as seven shareholders (also known as subscribers). Individuals or businesses can become subscribers. A public limited corporation can raise share capital to any extent because there is no limit on the number of shareholders it can have. There is no minimum capital requirement anymore, according to a 2013 modification to the Companies Act.
There is a requirement of minimum 3 directors. At least one of such directors must be a resident Indian. Both the directors and subscribers need not be the same person.
1. Better business opportunities:
The fact that a company is listed on a stock exchange ensures that mutual funds, hedge funds, and other traders are aware of its operations. This may provide the Public Limited Company with more business opportunities.
2. Spreading risk:
Since the shares are sold to the public at large the unsystematic risk of the market is spread out.
3. Capital abundance:
A public limited company's shares are available to the entire public, which implies that anyone can invest. As a result, the company's capital is increased.
4. Growth and expansion opportunities:
Due to less risk, there is a perfect opportunity for growing and expanding the business by investing in new projects from the money raised through shares.
1. Freely transferable:
Due to the ease with which shareholders can exchange shares in a public limited company, they are preferred by both retail and institutional investors.
2. No Capital limitations:
A public limited company is appropriate for capital-intensive businesses with high funding requirements since it can take funds from the general public.
3. Separate Legal Entity:
It is a legal entity that exists independently of its shareholders and directors. As such it can own assets and obligations in its own name.
4. Limited Liability:
Shareholder’s liability is limited to the amount of capital invested by them.
Verification of documents
Application for Name Approval (online RUN WEB Application on MCA Portal)
Obtaining DSC (Class-2) and DIN as required above. However, in new companies DIN can be obtained within SPICe + facility for up to 3 directors
Incorporation of company along with filing of e-MOA and e-AOA
Filing of Commencement of business certificate after 180 days.
No, as per the Act, it is mandatory that the director needs to be at least 18 years of age.
No, the public limited company is not eligible to start up registration
No, being a limited liability entity, the liability of a member of a company is limited to the face value of the shares the member owns. Upon payment of the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.
A Public Limited Company must have a minimum of three Directors and seven shareholders.
Yes, a Public Company must call its statutory Meeting and file Statutory Report with the Register of Companies. It is worth to note here that, the meeting of a Public Limited Company can be qualified as a Meeting only if the desired quorum of members is present else the meeting shall not be considered as valid. In case of a Public Limited Company, five members must be present personally to constitute a quorum. However, the Articles of Association may provide any number of members more than the required under the Act.
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