Public Limited Company
What Is a Public Limited Company?
A public company also called a publicly traded company is a corporation whose shareholders have a claim to part of the company's assets and profits.A Public Limited Company under Company Act 2013 is a company that has limited liability and offers shares to the general public. Its stock can be acquired by anyone, either privately through (IPO) initial public offering or via trades on the stock market.
A Public Limited Company is strictly regulated by the SEBI and in addition to its securities trading on public exchanges, a public company is also required to disclose its financial and business information regularly to the public.
.Requirements for incorporation of Public Ltd Company-
- Minimum 3 Directors.
- Minimum 7 Shareholders/Members.
- Minimum Share Capital of ₹ 5 lakhs.
Documents required for incorporating a public limited company-
- Identity and Address proof of all the directors and shareholders and their PAN number.
- Address proof of the proposed registered office of the company.
- DIN and DSC of Directors.
- Memorandum of association (MoA) and Article of Association(AoA) of the proposed company.
- Red herring Prospectus.
Advantages of Public Limited Companies-
- Can raise capital from the general public.
- Easy access to loans/credit lines.
- Growth and expansion opportunity.
- Attract FDI.
Disadvantages of Public Limited Companies-
- Huge Compliance Burden.
- Constant and regular watch on day to day business of the company by the market regulator.
- High risk ( one negative news about the company can destroy the entire valuation of the company).