What is the Advantages and Disadvantages of Public Limited Company


Public limited companies are those companies whose shares are traded in the stock market or issue fixed deposits. Simply stating, these are those companies that trade on a local exchange, whose shares can be bought and sold. These are registered under the Companies Act, 1980 with statutory minimum capital requirements and share offered to the public subject to the conditions of limited liability. The local laws of our country may not apply as strictly as it is normally indicated and there will likely be some variations. These companies are a kind of large business entity. It has limited liability and also offers shares to the public; also providing huge benefits to the people compared to the private limited company. The PLC shares can be purchased by anyone during trading on the stock market or initial public offers. Public limited company is the large scale business that consists of 3 directors and 7 shareholders. PLC enjoys huge benefits like limited liability, transferability, borrowing capacity, and others.
For public limited company registration, the company must have a minimum of 3 directors, 7 shareholders and a maximum of 50 directors. The shares can be transferred easily and getting a loan to the public sector is easy. If any of you are looking for the Online Process of Public Limited Company Registration in India, come and visit us!

Advantages:

● Limited liability
● Representative management
● Easy availability of capital by issuing shares to the public
● Separate legal entity
● Artificial person
● A company can sue and be sued in its own name
● Body corporate
● High credible entity compared to other types
● Unlimited capital investment opportunities
● Liquidity
● Easy to acquire other companies
● High-end business organizations
● Can issue shares to the general public
● More availability of capital to reinvest back into the company than non-public limited companies
● Raising capital through public issue of shares
● Widening the shareholder base and spreading risk
● Growth and expansion opportunities
● Diversification
● Pursue or gain new projects, new products or new markets
● Grow capital expenditure to support and enhance the business
● Make acquisitions by offering shares to the shareholders of the target business
● Acquire funds for research and development
● Pay off existing debt or replace existing debt with new debt on better terms
● Exit strategy

Disadvantages:

❖ More compliances than private
❖ More legal formalities as compared to other forms of company
❖ All the decisions must be taken by passing proper resolutions (ordinary or special)
❖ Maintenance of documents is more as compared to other forms
❖ Not much access to freedom
❖ No secrecy maintained
❖ More regulatory requirements
❖ Need to have a minimum of two directors
❖ More onerous and difficult rules applied for concerning loans to directors
❖ A suitably qualified company secretary must be appointed
❖ Higher transparency accounting records must be presentable within 6 months of the end of the financial year
❖ AGMs must be held
❖ Higher levels of transparency required
❖ Ownership and control issues

Public limited companies are huge business organizations. They possess a lot of capital invested in them and the investors are the public itself. So, if one wants to start a big business, a public limited company is a good idea. We can also guide you for Public Limited Company Registration in India.

Location: India

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