Public limited companies have all of the rights of a corporation but have fewer responsibilities, making them an excellent alternative for small and medium-sized businesses looking to raise equity financing from the general public.
BENEFITS OF PUBLIC LIMITED COMPANY REGISTRATION
- Limited Liabilities for the Shareholders of the Company-Shareholders in a public corporation benefit from limited liabilities, that means their resources are secure which can be used to pay off the firm's debts and losses. Regardless, the shareholders are solely accountable for their own legal violations. This right is enjoyed by all members, directors, and shareholders, and their assets cannot be seized by any bank, creditors, or government entities.
- Perpetual Succession-A continuous succession corporation is referred to as a public limited company. This means that the company will continue to exist even if one or more members/shareholders/directors die, retire, become insane, or become bankrupt.
- Improved Capital of the company-The general public is encouraged to purchase the company's shares in a public limited corporation. As a result, anyone can make an investment in a public company that increases its capital.
- Borrowing Capacity-A public corporation has access to an endless number of financing options. It can sell its shares and issue stock, debentures, and accept deposits from the general public. Furthermore, most financial institutions consider public corporations to be more prominent than unregistered businesses.
- Fewer Risks-Because public corporations can sell their shares to the general public, the market's unsystematic risks are reduced.
- Better Opportunities for Growth And expansion of The Company-Less liabilities mean more potential for the company to develop and thrive by investing in new projects with monies obtained from the sale of its market shares.
DOCUMENTS REQUIRED FOR PUBLIC LIMITED COMPANY REGISTERATION
Acandidate has to gather all these documents to file along with the incorporation application:
- Identity Proof such as Aadhar card, PAN card, Driving License, Voter Id of all the designated directors and shareholders.
- Address Proof of all the proposed directors and shareholder of the company.
- PAN card details of all the directors and shareholders
- Utility bill such as telephone, gas, water or electricity bill of the registered office as a residential proof of the business place. It should not be older than 2 months.
- An NOC or No Objection Certificate from the landlord of the business place.
- DSC or Digital Signature Certificate of the designated directors
- Memorandum of Association (MOA) and Article of Association (AOA)
CHARACTERISTICS OF PUBLIC LIMITED COMPANY REGISTRATION-
- Number of Directors in the Company-According to the Companies Act, a public company should have a minimum of three directors to be formed, although there is no limit on the number of directors that can be appointed.
- Prospectus of the Company-A company's prospectus is required for public limited corporations. It is distributed to the public at large by the proposed company. It is a detailed explanation of the company's works and affairs. Private corporations, on the other hand, are exempt from such regulations because they do not have the power to ask the public to buy their stock.
- Name of the Company-The word "Limited" should be added to the end of the name of all public limited companies. It's a symbol for a public company's purpose.
- Paid Up Capital-The act stipulates that there is no minimum capital need for registration.