Public Limited Company

A Public Limited Company (PLC) is a separate legal business entity which offers its shares to be traded on the stock exchange for the general public. According to the regulations of the corporate law, a PLC has to compulsorily present its financial stats and position publicly to maintain transparency.

 

Advantages

Steady business growth

Private Limited Companies can adapt tech-driven techniques and expand their business rapidly with the accessibility to an adequate amount of capital.

Raise capital through Issue of Shares

Insufficiency of capital is inevitable while running a business, but a Public Limited Company has the option to raise capital by the public issue of Shares, unlike a Private Limited Company.

Funds are easily transferable

The Shares of a PLC can be transferred easily. Since the stocks of a Public Limited Company are listed on stock exchange, it drives more potential shareholders.

Access to additional funding

Banks and financial institutions generally render credit/ loans to Public Limited Companies at favorable interest rates. Moreover, the authority lies in hands of PLC to negotiate the terms of conditions for loan repayment.

 Disadvantages

Higher Paid-Up capital

The formation cost of a Public Limited Company is much higher (INR 5 Lakh) in contrast to a Private Limited Company (INR 1 Lakh).

More stringent Regulations

A PLC has to comply with several statutory regulations. Such legal norms are set to safeguard the interest of the Company’s shareholders.

Transparent dealing is required

Since Public Limited Companies issue their Shares to the public, so they are required to disclose complete information about their potential growth and business operations. PLC does not have any privacy and cannot hide anything; even their account details receive media coverage.

Minimum Requirement for LLP:

Minimum Seven People:

Minimum seven people are required to start the public limited company in India. These companies shall have minimum three directors. The same seven people can become shareholder and director of the company. However, maximum any number of people can become shareholder in the public limited Company.

No Minimum Capital:

Capital of the business is depending on the need of the business and statutory no minimum capital is required to start the public limited company. However, minimum authorized and subscribed share capital required for public company is Rupees five lakhs.

One Resident Director:

Among director, one person must be resident Indian.

Unique Name:

The name of the public limited company should be unique and should not be similar to the any existing company name or trademark.

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