Registered and regulated by Companies Act 2013, a public limited company also benefits its members with limited liability. Applicable rules are more tough and stringent for a public limited company when compared with a Private Limited Company.
Benefits of a Public Limited company:
- Unlimited succession
- Easy borrowing
- Limited Liability
- Easy to raise funds for new projects
- Easy to invite a number of investors
- Regulatory strictness makes it more trustworthy than a Private Limited Company
- Free transferability of shares
Checklist of documents for registration of Public Limited company:
- ID and address proofs for Directors (min.3) and shareholders (Min. 7)
- Address proof for registered office address
- PAN card of Directors
- Utility bill of all directors, not older than 2 months
- NOC from owner of the registered office address
- MOA and AOA
- DSC of the Directors
Difference between a Private Limited Company and a Limited or Public Limited Company
| Point | Private Limited Company | Public Limited Company |
|---|---|---|
| Min. No. of Directors required | 2 | 3 |
| Min. no. of members required | 2 | 7 |
| Max. no. of members | 200 | No limit |
| Public Offer | No | Yes |
| Listing of shares at Stock Exchange | Not allowed | Allowed |
| Limit on Managerial remuneration | No restriction | As per regulations of Companies Act 2013, 11% of Net profits |
| Name | Must have a suffix ‘Private Limited’ | Must have a suffix ‘Limited’ |
| Share format | Paper/demat | Demat only |