Public Limited Company Formation
A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, acceptance of public deposits and transfer of shares. The liability of each shareholder is limited to the degree of the unpaid amount of the shares the premium thereon and face value in respect of the shares held by him. However, the liability of a Manager/ Director of such a Company can be unlimited at times.
A public limited company is a company, which is able to provide its shares to the public. It should include the words "public limited company at the end as part of its legal company name, which is able to trade on the stock market but in order to gain plc status the company must achieve the following:
- Minimum share capital of 5,00,000.
- Minimum of two directors.
- Its name must contain limited company.
- Secure a trading certificate from the Companies House.
These are the following steps to form a public limited company in India:
- A minimum of seven members are required to form a public limited company.
- It should have minimum paid-up capital of Rs 5 lakhs.
- There is no self-possession on maximum number of members.
- The shares allotted to the members are generously transferable.
- These companies can raise funds from general public through open invitations by selling its shares and accepting fixed deposits.
- These companies are required to write either 'public limited' or private limited' after their names.