Public Limited Company
A public limited company is a business that is managed by directors and owned by shareholders. A public limited company can offer shares to the public. There are also other obligations that a PLC must meet due to being public, including further admin regarding tax, and making their financial reports public so would-be shareholders have all the information they need before investing.
A public limited company is also listed on the stock market and essentially needs to be more open and public about its details than a private company.
Public Limited Company Details
Advantages of Public Limited Company
Businesses choose to become a public limited company because the pros of this new structure outweigh the cons.
- The company can raise capital through share sales
- This raised capital can fund expansion and new opportunities
- Capital can also be used to pay off debt
- Publicity increases brand awareness
- Listing on the stock market can increase company reputation and prestige
- Public records can make it easier to attract business partners
- Sense of transparency can improve customer perception of brand
Disadvantages of public limited company
- Two directors are needed for a PLC, whereas a Ltd only needs one
- More regulated both for taxes and Companies House
- HMRC tax deadlines are shorter for public companies
- Unlike Ltd’s company secretaries, a PLC’s company secretary must be fully qualified
- Shareholders can be anyone who chooses to purchase, which can dilute a unified company vision
- More vulnerable the more shareholders there are, the more power has been distributed
- A public limited company must hold an annual general meeting
Requirements for Registration of a Public Limited Company
There are various rules and regulations prescribed under the companies act, 2013 for the formation of a public limited company. Here is what you should keep in mind when registering a public limited company:
- Minimum 7 shareholders are required to form a public limited company.
- Minimum of 3 directors is required to form a public limited company. A minimum share capital of Rs. 5 lakhs is required.
- Digital signature certificate (DSC) of one of the directors is needed while submitting self-attested copies of identity and address proof.
- Directors of the proposed company will need a DIN.
- An application is required to be made for the selection of the name of the company.
- An application comprising the main object clause of the company is to be made. This object clause will define what a company will pursue after its incorporation.
- Submission of the application to ROC along with the required documents like MOA, AOA, duly filled Form DIR – 12, Form INC – 7 and Form INC – 22 is needed.