Public Limited Company
A Public Limited Company is a type of business structure that allows for public investment and share trading in the stock market. It is ideal for large businesses that require substantial capital and want to raise funds from the public. This structure provides transparency, credibility, and greater opportunities for business expansion.
Definition of a Public Limited Company
As per Section 2(71) of the Companies Act, 2013, a Public Limited Company is:
1. A company that is not a private company.
2. Has a minimum paid-up share capital of INR 5 lakhs.
Procedure For Formation Of Public Limited Company Registration Through TaxWare ?
Benefits Of Formation Of Public Limited Company
(A) Easy Transferability
As the ownership of a company is represented by shares, the ownership of a company can be transferred to any other legal entity or person in India or abroad easily - in part or whole.
(B) Limited Liability
Shareholder enjoys limited liability to the extent of capital invested. In case of any unforeseen liabilities, it would be limited to the company and not impact the shareholders. Shareholder's personal assets protected in the event of the company's insolvency.
(C) Funding
A Company can easily raise funds from investors on an equity basis i.e. from persons or entities interested in becoming a shareholder.Limited company also enjoys wide options to raise funds through Bank Loans, General Public and Institutional Investors.
(D) Separate Legal Existence
A company is a Separate legal entity from its Owners and Management in the eyes of law.It can have a PAN number, bank accounts, licenses, approvals, contracts, assets and liabilities in its unique name.
(E) Listing of Shares
Public Limited Companies get listed with stock exchanges to raise capital from the general public.
(F) Credibility
Public Limited Companies are popular and well-known Business Structure. Corporate Customers, Vendors and Government Agencies prefer to deal with Public Limited Companies instead of Proprietorship or Partnership Firms.
Why Choose a Public Limited Company Over Other Business Structures?
| Business Type | Limited Liability | Easy Fundraising | Separate Legal Entity | Public Shareholding |
|---|---|---|---|---|
| Proprietorship | ❌ No | ❌ No | ❌ No | ❌ No |
| Partnership | ❌ No | ❌ No | ❌ No | ❌ No |
| LLP (Limited Liability Partnership) | ✅ Yes | ✅ Limited | ✅ Yes | ❌ No |
| Private Limited Company | ✅ Yes | ✅ Yes | ✅ Yes | ❌ No |
| Public Limited Company | ✅ Yes | ✅ Yes | ✅ Yes | ✅ Yes |
