Public Limited Company
Public Limited Company Registration
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Public Limited Company
There are many types of companies, the most popular forms are private limited and public limited company. Both have its own advantages and disadvantages. Therefore, an entrepreneur will have to choose the type of company depending upon the funding plans.
The public limited company is governed under the provisions of the Indian Companies Act, 2013. While there is no limit on the number of members, it is formed by the association of persons voluntarily with a minimum paid up capital of 5 lakh rupees. Transferability of shares have no restriction. The company can invite public for subscription of shares and debentures. The term public limited is added to its name at the time of incorporation.
A public limited company get itself listed on a recognized stock exchange and the stocks are traded publicly. On the other hand, a private limited company is neither listed on the stock exchange nor are they traded. It is privately held by few shareholders only.
The transferability of shares is restricted completely in private limited company. While the shareholders of a public company can transfer their shares freely.
Since there is a limited number of people and fewer restrictions, the scope of a private limited company is limited. In contrary, the scope of a public company is vast. This is because the owners of the company can raise capital from the general public and must abide by many legal restrictions.
There is a greater regulatory burden on a public limited company. This is because a great amount of information must be made available to the public who are shareholders or prospective shareholders. A lot of money has to be invested in order to prepare reports and disclosures that match with the regulations provided by SEBI.
A signed written resolution is received by holding general meetings of a private limited company. While it mandatory for public companies to appoint a company secretary, private companies may choose to do so only at their will.
Depending upon one’s need a type of company is chosen to be registered. However, the principal reason for choosing a public company is to have the ability to offer shares to the public. Talk to our expert if you are desirous to start your venture and needed support and guidance.