Its shares are offered to the general public by a Public Limited Company (PLC). Anyone can purchase its stock, either privately through an initial public offering (IPO) or publicly through stock trades.

The financial health of PLCs must be disclosed to shareholders in strict compliance with regulations. Shareholders and the public will be held more accountable as a result.

Features of public companies:

According to the Companies Act, 2013, public limited companies must have at least three directors, and there is no limit on the number of directors.

Shareholders of a public limited company are limited in their liability. The shareholders of a public limited company aren’t personally accountable for the company’s losses or debts beyond what they invested in the company. In contrast, partners and the business owners are jointly and severally liable for the business’s debts in partnerships and sole proprietorships.

It is a legal requirement for a public limited company to have a minimum paid-up capital of Rs 5 lakh or such a higher amount as it is prescribed by law.

Public limited companies are required under the Act to issue a prospectus, which is a detailed statement of the company’s affairs.  However, there are no such provisions for Private Limited Companies. This is because private limited companies cannot invite the public to subscribe to their shares.

Leave a Reply

Your email address will not be published. Required fields are marked *