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Public limited company  

A public limited company is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Its main features are The company has a separate legal existence apart from its members who compose it.

In terms of section 3(1)(iv) of the Companies Act, 1956, means a company which is not a private company and has a minimum paid-up capital of five lakh rupees or such higher paid-up capital as may be prescribed. A private company which is subsidiary of a public company is also a public company.

A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager of such a Company can at times be unlimited. The minimum number of shareholders is 7.

A limited company grants limited liability to its owners and management. Being a public company allows a firm to sell shares to investors this is beneficial in raising capital.

Following are the main features:

At least 7 persons are required to form a public limited company but there is no limit as regards the maximum numbers.
Its formation, working and its winding up, in fact, all its activities are strictly governed by laws, rules and regulations. The Indian Companies Act, 1956 contains the provisions regarding the legal formalities for setting   up of a public limited company. Registrars of Companies (ROC) appointed under the Companies Act covering   the various States and Union Territories are vested with the primary duty of registering companies floated in the   respective states and the Union Territories.
A prospectus or a statement in lieu thereof has to be filed with the Registrar of Companies before allotment of shares.
It has to obtain Certificate of Commencement of Business from the Registrar of Companies before it can commence business on incorporation.
It has to hold a statutory meeting of members and file a Statutory Report with the Registrar of Companies.
The company collects its capital by the sale of its shares and those who buy the shares are called the members. The amount so collected is called the share capital.
The company collects its capital by the sale of its shares and those who buy the shares are called the members. The amount so collected is called the share capital.
The shares of a company are freely transferable and that too without the prior consent of other shareholders or   without subsequent notice to the company. Any member of the public who is willing to pay the price may acquire its shares or debentures.
It can have any number of members and it is easy for it to raise capital through public subscriptions.
It can obtain loans from financial institutions and banks.
The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company
It shall have at least three Directors

As a company is an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders

A limited company has following advantages:

Members' (the directors and shareholders) financial liability is limited to the amount of money they have paid for shares.
The management structure is clearly defined, which makes it easy to appoint, retire or remove directors.
If extra capital is needed, it can be raised by selling more shares privately.
It is simple to admit more members.
The death, bankruptcy or withdrawal of capital by one member does not affect the company's ability to trade.
The disposal of the whole or part of the business is easily arranged.
High status.
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