A public limited company is voluntary association of members which is incorporated and therefore has a separate legal entity. Public limited company is best choice of corporate entity for large sized business. Its grants limited liability to its owners and management members. A public limited company can sell shares to investors for raising funds. Investors include general public, other business entities, governments, etc. Minimum seven members are required for starting a public limited company in which three members are appointed as directors of the company. In public limited company maximum cap of members is not exist means there is no limits on number of members. A public limited company has all most characteristics of any private limited company. In Public limited company easily transferability of shares are easy and transparent. They can also trade their share on stock exchange. A public company can issue prospectus to its investors.
REASON TO REGISTRED PUBLIC LIMITED COMPANY:
A public limited company treated as Separate legal entity in the eyes of law. The company can own property and also raise debt on his own name. Shareholder of public company after signing and filing of share transfer form easily transfer his shares to another person. A public company is only legally dissolved. Any changes in membership and management cannot interrupt in its existence. Being a juristic person company can do anything on its own name. Company can also borrow fund from banks, financial institutions, etc. Company can issue shares, debentures, preference shares, deposits etc.
Documents Required for Public Limited Company:
- Copy of Pan Cards of all members.
- Copy of identity and address proof of all members like adhaar/voter id/ passport etc.
- Bank statements of all members.
- Proof of registered office i.e. Electricity bill/ Gas bill/
- No objection certificate from landlord/ owner of premises.
- Photograph of all member.
- Email ids and phone numbers.
- Apply for Digital signature certificate of all members.
- Apply for Director Identification number (DIN) of minimum 3 directors.
- Filing of name for approval.
- Drafting of Memorandum of Association and Article of Association.
- Document stamping and affidavit.
- Incorporation form with all documents filing with MCA.
- Fee payment.
- Incorporation Certificate issued by MCA within 7 to 10 working days.
ADVANTAGE OF PUBLIC LIMITED COMPANY:
- Raising Fund easily from public.
- Shareholders able to sell and buy shares.
- Growth and expansion opportunity is high other than any other type of business registration.
- Prestigious profile in the eyes of third party.
- Limited liability of shareholders.
- Business has separate legal entity.
DISADVANTAGE OF PUBLIC COMPANY:
- There are lots of legal formalities.
- Original owners loss there control in company.
- Management problem.
- Huge investment.
- Tax burden.
- Takeovers risks.