REQUIREMENTS FOR PUBLIC LIMITED COMPANY REGISTRATION:
- Minimum 7 shareholders and 3 directors are needed.
- Minimum authorized share capital of ₹5 lakh.
- Digital Signature Certificate (DSC) for at least one director.
- Directors must have Director Identification Number (DIN).
- Company name must comply with the Companies Act rules.
- Required documents include Memorandum of Association (MOA), Articlesof Association (AOA), and Form DIR-12.
- Payment of prescribed registration fees to the Registrar of Companies (ROC).
ADVANTAGES:
- Access to large capital – By offering shares to the public, the company can raise substantial funds for growth and expansion.
- Enhanced credibility and visibility – Being listed on a stock exchange attracts investors, mutual funds, and stakeholders, boosting the company’s reputation and business opportunities.
- Risk diversification – Sharing ownership with numerous shareholders spreads financial risk across many investors.
- Unlimited growth potential – With access to public funds, the company can invest in new projects, expand operations, and scale rapidly.
- Liquidity for shareholders – Shares can be easily traded on the stock market, providing liquidity and flexibility for investors.
COMPARISON BETWEEN PUBLIC LIMITED COMPANY AND PRIVATE LIMITED COMPANY
Basics |
Public Limited Company |
Private Limited Company |
|
Minimum: 7 Maximum: No Limit | Minimum: 2 Maximum: 200 |
|
Minimum: 3 | Minimum: 2 |
|
Yes | No |
|
Required | Not Required |
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Must have ‘Limited’ at the end of its name | Must have PVT. LTD. at the end of its name |
|
Yes | No |
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There are no as such restrictions | Cannot exceed the limit of 11% of its net profit |
|
Can be enlisted in the stock exchange & conduct the Stock Trade publicly as per the Director’s preferences | Not listed on stock exchange neither carry out stock trade publicly |