Public Limited Company
A public limited company, India is the standard legal designation of a company which offers shares to the general public and has the benefit of limited liability. It requires a minimum of 7 shareholders to form such a company, assuming that it has a lawful purpose.
To start a business with a single owner Proprietorship Firm is the option for entrepreneurs but unlike a company proprietor cannot enjoy the advantage of limited liability.
It is a company whose securities are traded on a stock exchange and can be bought and sold by anyone. Public companies are strict in their regulation, and are required by law to publish their complete and true financial position to enable the investors to determine the true worth of its stock (shares).
The benefits of a Public Limited Company to Indian Owner, India are enough to attract an entrepreneur. Here, transferability of shares is easy and hence it provides the scope to Public Limited Company to raise capital from General Public through selling its shares or debentures or accepting fixed deposits. After observing Public Limited Company, advantages and disadvantages, one can easily opt for Public Limited Company.
Large capital can be raised in case of Public Limited Company. Limited liability and freely transferable shares also add up to the advantages of public limited company. But sometimes a large no of legal formalities can serve as a disadvantage also.
Minimum capital requirement for a public limited company is Rs. 5,00,000.
Minimum number of members or shareholders required is seven.
Must have minimum number of at least 3 directors.
a. Shares of a public limited company are freely transferable and no need to take any one’s consent for such transfer.
b. The liability is limited to the face value of the shares the shareholder’s own.
c. Shareholders do not have the right to participate in the day to day management of the business.
a. Obtaining Digital signature certificate (DSC) and Director Identification number (DIN).
b. Approval of name from Ministry of Corporate Affairs (MCA), Government of India.
c. Company registration.
A registration certificate issued by the registrar of company will be valid throughout the life of the company.
15-20 working days.
Digital Signature Certificates (DSC) are the electronic format of physical or paper certificates. It is mandatory to sign some electronic forms/returns filed with The Ministry of Corporate Affairs (MCA). So DSC is required for all directors of the proposed company.
As a public limited company deals with public money it has to make rather heavy compliances strictly, which are bulkier than those performed by a private limited company. Apart from the regular compliances related with income tax, there are many periodic and annual compliances to be made by a public limited company with ROC/MCA, SEBI, and RBI etc.
Below is the comparison between Sole proprietorship, Partnership, Private Limited Company, Limited liability partnership, One person company and Public limited company