Public Limited Company

Incorporation of a Public Limited Company

As per Companies Act 2013, a Public Limited Company is a company that has limited liability and may offer shares to the general public by Initial Public Offer (IPO). Where the company is listed, an individual can also acquire the shares of such company via stock market. A Public Limited Company has stringent regulatory requirements and has no exemption allowed under the Companies Act 2013. A private company which is Subsidiary of a Public company shall also be deemed to be Public Company.

A Public Company must have at least seven shareholder and minimum three directors. There is not limit for maximum shareholder in a public company.

Its shares are freely transferable and that too without the prior consent of other shareholders. It is independent legal person; its existence is not affected by the death, retirement or insolvency of any of its shareholders. These companies can invite capital and deposits from the public. These Companies can be listed or unlisted.

A public company can only be listed on stock exchanges and can issue securities to general public through an initial public offering (IPO). Shares of only public company can be traded on stock exchanges. Public companies are subject to higher levels of reporting, regulations, and public scrutiny. A listed Public company must meet stringent reporting requirements set out by Securities and Exchange Board of India (SEBI).

The Company Incorporation rules, requirements, process, and procedures vary more or less depending particularly on the type of company to be incorporated.