Business

What Are The Benefits Of Public Limited Company Registration?

Public Limited Company Registration

Public Limited Company Registration! Under the provisions of the Companies Act of 2013, a Public Limited Company (PLC) is a company that has limited liability and offers shares to the general public. The Public Limited Company Registration is done as per the rules and regulations of the Companies Act of 2013.

Overview of Public Limited Company Registration

A Public Limited Company has all the rights of the corporate body, offering shares to the general public and limited liability for the company’s members. The Public Limited Company Registration is done as per the rules and regulations of the Companies Act of 2013. A Public Limited Company is the ideal choice for small and medium scale businesses who want to increase the equity capital by offering shares to the general public.

A Public Limited Company can be integrated with a minimum of three directors and seven members; there is no prescribed limit by the principal act for the maximum number of members.

The rules and regulations of a public limited company are more stringent as compared to a Private Limited Company, but it has all the benefits of a Private Limited Company along with easy transferability of shareholding & ownership and more transparency. Shares, formation, Name, management, directors, and the number of members, etc. differentiate a private limited company from a public limited company.

Features of Public Limited Company Registration

The following are the essential features of public limited company registration:

· Number of Directors in the Public Limited Company

Under the provisions of the Companies Act of 2013, a public limited company should have a minimum of three directors at the time of registration, but there is no restriction on the company’s maximum limit.

· Name of the Public Limited Company

It is mandatory for all the registered public limited company to add “Limited” at the end of their name. The “limited” at the end of the name denotes the identity of a public company.

· Prospectus of the Public Limited Company

Prospectus of a public limited company is compulsory. The proposed public company issues the prospectus for the general public. It is a note of broad statements of affairs and work of a public limited company. On the other hand, private limited companies do not have such compliances as they do not have the right to offer shares to the general public.

· Paid-Up Capital for Public Limited Company Registration

Under the provisions of the Companies Act of 2013, there is no minimum capital required for the registration of a public limited company.

Necessary Documents for Public Limited Company Registration

The applicant must collect all the necessary documents mentioned below to file along with the registration application:

  • Identity proof issued by the government such as PAN Card, Aadhar Card, Voter ID card, Driving License of all the proposed shareholders and directors.
  • Address proof of all the projected shareholders and directors of the company.
  • All the shareholders and directors must provide PAN card details.
  • Utility bills such as water bill, telephone bill, electricity bill, etc. of registered office address as a residential proof of the business place. The utility bills must not be older than two months.
  • NOC from the landlord, if the registered office is on a rented premise.
  • DIN of all the proposed directors.
  • DSC of the proposed directors.
  • MOA and AOA

Benefits of Public Limited Company Registration

The following are the benefits of registering a company as a public limited company:

registration

· Limited Liability for the Shareholders

The Shareholders of a public limited company has the benefit of limited liability. Limited liability protects the shareholders’ personal assets as the shareholder’s assets cannot be taken by the bank, or they cannot be used to clear losses or debts of the public limited company. The shareholders of a public company are liable for their own legal offenses.

· Perpetual Succession

A public limited company is measured as a corporate entity, which has perpetual succession. Perpetual succession means if, in case of retirement, death, insolvency, and insanity of one or more shareholders, directors, or members, the company still continues its business functions.

· Raise Capital through Issue of Shares

A shortage of capital is unavoidable while running a business, but public limited company registration gives shares to the general public to raise capital. The public is invited to buy shares by offering or trading shares on the stock market. Therefore, any person can invest in a public limited company that improves the company’s capital.

· Borrowing Capacity

A public limited company enjoys limitless sources for borrowing funds. A public limited company can issue debentures and equity and sell its share to the general public and accept deposits. Furthermore, most of the banks and financial institutions find public limited companies more prominent for loans and borrowings than other unregistered organizations. The public limited company also holds the authority to negotiate the terms and conditions of loan payment.

· Funds are Easily Transferable

The shares of a public company are easily transferable. The stocks of public limited companies are listed on the stock market, so this attracts more shareholders to invest in the company.

· Steady Business Growth

The public limited companies have the advantage of adapting tech-driven modus operandi and expand the business swiftly with the accessibility to a sufficient amount of capital.

· More Attention

The public limited companies are listed on the stock exchange; this ensures that hedge funds, mutual funds, and other traders pay attention to a public limited company’s business. This attention may result in exceptional business opportunities for a public limited company.

· Spreading Risk

The shares of a public company are sold to the public through initial public offerings or by trading them on the stock exchange, so the large unsystematic risk of the market is spread out.

· Better Opportunities for Expansion and Growth

The spreading of the risk leads to enhanced opportunities so that the public limited company can expand and grow by investing in new ventures from the funds raised by selling shares in the stock market.

Conclusion

The Public Limited Company Registration is done as per the rules and regulations of the Companies Act of 2013. A Public Limited Company has all the rights of the corporate body, offering shares to the general public and limited liability for the members of the company. A Public Limited Company is the ideal choice for small and medium scale businesses who want to increase the equity capital by offering shares to the general public.

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