Public Limited Company Registration
What is a Public Limited Company?
In the simplest terms, a Public Limited Company is a company whose shares can be bought by the public. Anyone can acquire these shares, either privately through Initial Public Offering (IPO) or via trades on the stock market. This form of a business structure is highly corporate in nature and is beneficial for businesses in the long run.
The company generates its capital by the selling of shares, the shareholders become the members, and the amount collected is called the share capital. However, the liability of the shareholders is only limited to the amount of shares they own.
The major difference between a Private Limited Company and a Public Limited Company is that the latter is strictly regulated. Under the Companies Act 2013, it is required to issue a Prospectus wherein the true financial health and the affairs of the company are to be shared with the public.
Benefits & Liabilities of a Public Limited Company
Benefits of a Public Limited Company
- Limited liability of shareholders.
- Ownership can be easily transferred by transferring of shares.
- A Public Limited Company is recognized as a separate entity. Therefore, it can own, acquire as well as alienate, property under its own name.
- The company continues to exist even after the demise of a shareholder.
- Capital generated from the public spreads the market risks and provides greater opportunities for expansion.
- Being listed on the stock market exchange ensures that the business draws the required attention from mutual funds, hedge funds and other traders.
General & Tax Liabilities of a Public Limited Company
- The company must hold annual board meetings.
- Annual returns are to be filed with MCA (Ministry of Corporate Affairs)
- Account to be annually audited by CA.
- It is mandatory to file annual return with the Income Tax Department