A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager of such a Company can at times be unlimited. The minimum number of shareholders is 7.

Advantages of a Public Limited Company

Limited Liability

It means that if the company experience financial distress because of normal business activity, the personal assets of shareholders will not be at risk of being seized by creditors.

Finance and Resources

Scope of expansion is higher because easy to raise capital from financial institutions as well as from public through IPO.

Business Continuity

Private limited companies enjoy permanent succession because the company is its own legal entity. Shareholders and employees act “as agents of the company,”

Long-Term Planning

Formation of private limited company is always preferred when the business setup is for long term.

Social Benefit

A company enjoys the benefit of credibility among the customer & public and customer reliance on a company is much higher than any other form of business.

Flexibility

One of the most important features of Company is flexibility with regard to changing name of company, ownership and main objects of company.