Public Company means a company which has such minimum share capital as provided under the provisions of companies act and which do not by it’s article restrict the transferability of shares, offer to public to subscribe for it’s securities, limit the number of members to two hundred.
Why to choose public Limited Company Form?
- EASY TO RAISE FUNDS - Publicly traded companies are able to raise funds and capital through :
- Private Placement to its relatives, members, director friends and known not exceeding 200 persons excluding present and past employess.
- Public Issue through IPO and/or FPO to public at large.
- SMOOTH TRANSFER OF SHARES – The shareholders of a public company can freely transfer their shares to any other member, director, or any other person.
- NO CEILING ON THE MAXIMUM NUMBER OF MEMBERS - There is no ceiling on the maximum number of members in a public company.
- SEPARATE LEGAL STATUS :- The legal status of the founders is separated from the company by the acts of Public Limited Company. The founders and the business are recognized as two separate entities in the eyes of the law.
- LIMITED LIABILITY :- Members of companies are liable to contribute to the asset of the company up to the amount remaining unpaid on their holdings.
- AVAILABILITY OF FUNDS :- Company can increase it’s capital base through public offers.