Help Center
Locate us
Public Limited Company - Meaning, Advantages & Registration
Open a Kotak Online Current Account & get your account number smoothly through video KYC | APPLY NOW
Popular Products
Show More
Quick Help
Show More
Frequently Asked Questions
Show More
A public limited company is a commercial entity in which ownership is divided into shares that are traded on a stock exchange.
A public limited government company is a firm in which the government owns the majority of the shares. It functions similarly to a regular public limited corporation but with government ownership.
Any single individual does not own PLCs. Shareholders of the companies hold the ownership.
The choice between Pvt Ltd and Ltd depends on factors like size and business growth goals. Each entity has its advantages and suitability based on specific business needs.
The minimum number of members in a public limited company should be 7.
Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
Success
Failure
Are you considering launching a business on a large scale? If so, have you explored the concept of a public limited company? A public limited firm is a distinct legal entity with its own identity, offering unique advantages and opportunities in the business landscape.
A public limited company is legally regarded as a separate organisation distinct from its shareholders. Read on to understand the definition of a public limited company, its advantages and other important factors.
What is a Public Limited Company?
A public limited company (PLC) is a form of corporation that is publicly traded on the stock market. This kind of company is governed by the regulations of the Companies Act of 2013. Public limited companies offer shares to the general public, allowing for limited liability investment opportunities. These shares are available for investment through an Initial Public Offering (IPO). Additionally, PLCs are obligated to significantly stricter regulatory standards than private limited businesses, including financial reporting and transparency duties to shareholders and regulatory agencies. They often have a wider shareholder base and are usually larger than private limited businesses.
How do Public Limited companies work?
PLCs in India function in one of two ways: based on their preferences, they can choose to be listed or unlisted on the stock market. However, once listed, these companies are mandated to provide yearly financial reports to establish their financial health and build credibility with investors and stakeholders. In contrast to private businesses, the duration of stockholders does not influence the continual existence of the corporation. PLCs are subject to increased regulatory scrutiny regardless of whether they can obtain funds through the stock market.
Requirements to start a Public Limited company
Adherence to several regulations outlined in the Companies Act 2013 is imperative to establish a PLC. Here is a comprehensive checklist outlining the essential steps for registration:
Advantages of a Public Limited Company
The features of a public limited company make it distinct from other businesses. Here are the significant benefits it offers:
Limited Liability Protection
Limited liability protects shareholders' personal assets in PLCs from corporate debts or defaults.
Share Transferability
A public limited company offers investors flexibility and liquidity in their investment portfolios by allowing them to trade their shares on stock exchanges hassle-free.
Enhanced Government Support
PLCs receive advantages in government initiatives, rewards, and subsidies intended to boost economic growth and development.
Professional Management
These companies are typically overseen by a board of directors comprising professionals with expertise across various domains of business management, ensuring effective governance and strategic decision-making.
Increased Capital Accessibility
PLCs can generate funds by issuing public shares, allowing them to reach more investors and gain access to extensive financing opportunities.
Difference between a Private Company and a Public Company
Let's understand the differences between a private limited company and a public limited company.
Parameters
Public Limited Company
Private Limited Company
Definition
A company owned by multiple individuals and listed on a stock exchange.
A closely held company with no stock exchange listing.
Paid-up Capital
Minimum Rs 5,00,000
Minimum Rs 1,00,000
Subscription from Public
Entitled to accept subscriptions from the general public for share or debenture issuance.
Prohibited from accepting subscriptions from the general public.
Directors
Minimum 3 Directors required
Minimum 2 Directors required
Members
Minimum of 7 members required
Minimum 2 members required
Appointment of Directors
A single resolution is needed to appoint one director.
A single resolution may appoint two or more Directors.
Retirement of Directors
⅔ of Directors retire by rotation annually, with at least ⅓ retiring each year.
No mandatory retirement by rotation.
List of Documents Required for Public Limited Company
Here’s a list of documents required for a PLC (Only Indicative):
Process of Public Limited Company Registration: Step-by-Step Guide
Here's a step-by-step guide to the registration process for a PLC:
Read Also : Stakeholders: What Are Stakeholders In Business: Definition, Meaning, Types, and Examples
You have already rated this article
OK