Publice Limited Company

Advantages of Becoming Publice Limited Company

Separate Legal Existence

The Company is considered as artificial person created by law, thus the existence of Public Limited Company is distinct from its members, it enjoys its own identity, and thus it can sue or being sued in its own name and it can also possess the assets in its name.

Limited Libility

The characteristic of Limited Liability is like cherry on the cake, the shareholders enjoy the privilege of having liability limited only up to the amount of shares subscribed, hence unlike Partnership Firm,investors are attracted to this kind of form of business.

No Minimum Capital Requirement

There is a misbelief that one requires huge investments to start a Private Limited Company, though in reality there is no minimum capital requirement, one can start a Private Limited Company even with minimal amount.

Ease of Raising Fund

A Public Limited Company can easily raise capital through the issue of shares from the public. Public is more attracted for the investment in a public company as the shares are easily transferable. Also the debt finance is easily available to a public limited company.

Perpetual Existence

The existence of Private Limited Company is not dependent on any factor, hence members and directors of the company may change but it will not affect the status of the Company.

Comparison

Topics Public Limited Company Private Limited Company
Members / Shareholders Minimum: 7 Maximum: No Limit Minimum: 2 Maximum: 200
Directors Minimum: 3 Minimum: 2
Public Invitations Yes No
Issuance Of Prospectus Required Not Required
Name Variances Must have ‘Limited’ at the end of its name Must have PVT. LTD. at the end of its name
Mandatory Statutory Meeting Yes No
Managerial Remunerations There are no as such restrictions Cannot exceed the limit of 11% of its net profit
Stock Exchange Can be enlisted in the stock exchange & conduct the
Stock Trade publicly as per the Director’s preferences
Not listed on stock exchange neither carry out stock trade publicly