Public Limited Company
Public Limited Company in India is formed by the association of persons voluntarily with a minimum paid up capital of Rs. 5 lakh rupees and minimum number of members required to start a public company is seven. A public limited company is governed under the provisions of the Indian Companies Act, 2013, that are incorporated, have a separate legal existence and limited liability. Public Limited Companies are companies whose shares are traded in stock market or can invite public for subscription of shares and debentures. The issue of prospectus or statement is mandatory in case of public company.
With its large requirements to incorporation and operation as well as greater regulatory burden, a public company no longer wishes to operate within the business model, there is an option for it to return to the private limited company.
Types of Public Limited Company:
Public Limited Company in India are of 2 types:
1. Listed company- A listed company means a company has its securities listed on any recognized Stock Exchange. A listed Company is recognized as a Public Limited Company because it makes an Initial Public Offering or IPO to sell its shares to the public and to get capital in return. A listed Companies shares can be traded in the stock exchange.
2. Unlisted company- An unlisted Company can be a Public Limited Company or a Private Limited Company. The shares of the unlisted companies are not available for the general public. An unlisted Company is not listed in any stock exchange because it does not have any limited number of shares. An unlisted Company can have an unlimited number of shareholders for raising capital for any commercial venture.
Registration of Public Limited Company
1. ASK Commercial Solutions can help you with company registration across India hassle free and at a very competitive price. We have a team of qualified company secretaries and chartered accountants, who ensure highest customer satisfaction and timely delivery of service.
2. For Public Ltd. minimum 3 directors and 7 shareholders are required, one Indian Resident is compulsory.
3. For hassle free registration, submit all required documents to our mail id or can contact us for any further query.
4. Know about documents required for Public Limited Company registration; Click here
Advantage of Public Company Registration :
Separate legal entity.
Raising capital through public issue of shares.
Widening the shareholder base and spreading risk.
Transferability of shares.
Finance, Growth and expansion opportunities.
Options for the founders to exit the business at some point.
A company can sue and be sued in its own name.
Disadvantage of Public Company Registration :
More regulatory requirements.
Minimum capital compulsion.
Higher levels of transparency required.
Initial financial commitment is higher.
Not much access to freedom.
All the decisions must be taken by passing proper resolutions.
Compliances of Public Limited Company:
Public Limited Company requires to file audited financial statements with the Ministry of Corporate Affairs at the end of each Financial Year like all types of Companies as well as Compliances under all Rules and Regulations associated with SEBI.
In addition to Annual compliance, there are Some of the other laws such as RBI, FEMA, IPR, and ESI Regulations, etc. also bring compliances. A Public Limited Company has to follow compliances accordingly.
It can also say that relatively high compliances as compared to Private Limited Company or a One Person Company.