A limited company grants limited liability to its owners and organization. Being a public company allows a firm to sell shares to investors this is beneficial in raising capital. A smallest amount of three Directors are necessary for establishing a Public Limited Company and it has more stringent regulatory requirements compared to a Private Limited Company.
Public Limited Companies are those types of companies where least number of members is seven and there is no cap on the maximum number of members. A public limited company has most of the characteristics of a private limited company. A public limited company has all the advantages of private limited company and the capability to have any number of members, ease in transfer of shareholding and more transparency. Identifying marks of a public limited company are name, number of members, shares, patterns, management, directors and meetings, etc.,
Separate Legal Entity
A corporation is an official entity and a legal person recognized underneath the Act. So a corporation appearance of association has broad legal ability and can possess property and also acquire amount overdue. The member of a corporation has no legal responsibility to the creditors of a business for such amount overdue.
A corporation has continuous progression, that is continued or nonstop survival until it is officially dissolved. An organization, being a split authorized person, is unaltered by the death or other disappearance of any associate but continues to be in existence irrespective of the changes in relationship.
A company enjoys improved avenues for borrowing of funds. It can issue debentures, secured as well as unsecured and can also accept deposits from the public, etc. Even banking and financial institutions prefer to render large financial assistance to a company rather than partnership firms or proprietary concerns.
Shares of a company limited by shares are moveable by an investor to any other person. Filing and signing a share transfer form and handing over the purchaser of the shares along with share certificate can easily transfer shares.
A company being a juristic person, can gain, own, enjoy and alienate, property in its own name. No shareholder can create any claim upon the property of the corporation so long as the corporation is a going concern.
Limited Liability means the category of being legally responsible only to a limited quantity for debts of a company. Unlike proprietorships and partnerships, in a limited liability firm the liability of the members in respect of the company’s debts is limited.