A Public Limited Company under Company Act 2013 is a company that has limited liability and offers shares to the general public. It’s stock can be acquired by anyone, either privately through (IPO) initial public offering or via trades on the stock market. A Public Limited Company is strictly regulated and is required to publish its true financial health to its shareholders.
Public Limited Company assures the limited liability to its Members and Owners. The major advantage of incorporating this type of entity is that a Public Limited Company is freely allowed to raise funds from public by Issuing of Shares or Debentures but need to follow certain norms and regulations. There are many regulatory requirements for a Public Limited Company than the Private Limited Company.
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Documents Required for Public Limited Company Registration
- PAN Card and AADHAR Card of all the proposed Members and Directors. Passport in case Foreign Citizen.
- Bank Statement of Proposed Members and Directors not older than 2 months
- Latest Passport Size Photographs of Members and Directors
- Contact details of all the proposed Members and Directors
- Proposed Name for Company
- Business Object
- Education Qualification of Proposed Directors and Members
- Occupation of Proposed Directors and Members
- Shareholding Ratio
- Address details of registered place of business (Electricity Bill / Rent deed / Copy of registry / Consent and NOC of Owner)
Advantages of Public Limited Company
Following are the advantages of forming a public limited company:
More capital: Shares are offered to the general public at large i.e. anyone can invest in a public limited company. Hence, improves capital of the company.
More attention: Being listed on a stock market ensures that mutual funds, hedge funds and other traders take note of business of the company. This may result in better business opportunities for the Public Limited Company.
Spreading risk: Since the shares are sold to the public at large the unsystematic risk of the market is spread out.
Growth and expansion opportunities: Due to less risk, there is a perfect opportunity for growing and expanding the business by investing in new projects from the money raised through shares.
Limited Liability: The liability of the Members is limited to the extent of Capital invested by them in the Company and therefore, they cannot be held personally liable for it also it is a legal entity which means it is different from its Members and Directors.