Public Limited Company
A public limited company registration in India with minimum paid-up capital at the time of incorporation INR 500,000/-. There is no limited to the maximum number of shareholders, but the minimum number of member must be seven. Again, there must be at least three directors to the proposed public limited company. The proposed names must include in the end the words, ‘Limited’. A company whose securities are traded on stock exchange and can be bought and sold by anyone.
Why Public Limited Company?
- LARGER FUNDS: The capital of a public company is generally raised from the public. People belonging to all walks of life throughout the country can buy shares which are priced at low levels.
- LIMITED LIABILITY: The liability of members of a public company is limited. They have to face limited risk.
- TRANSFERABILITY OF SHARES: The shares of a public company are freely transferable. This makes investment in the shares liquid and an investor is not bound to remain with the company.
- DEMOCRATIC MANAGEMENT: Management of a company is not confined to a few persons. Shareholders can elect and remove directors. They exercise control over management in general meetings of the company.
- PUBLIC CONFIDENCE: A public company enjoys greater confidence of public because its accounts are published and it operates under statutory regulation and control. Shares of a public company are traded on stock exchanges.
- GROWTH OF CAPITAL MARKET: A public limited company facilitates the growth of a healthy capital market primary and secondary markets for securities have developed largely due to the shares and debentures issued by public companies.