A Public Limited Company under Company Act 2013 is a company that has limited liability and offers shares to the general public. It's stock can be acquired by anyone, either privately through (IPO) initial public offering or via trades on the stock market. A Public Limited Company is strictly regulated and is required to publish its true financial health to its shareholders.
Advantages of Public limited companies
Following are the advantages of forming a public limited company:
- More capital
Shares are offered to the general public at large i.e. anyone can invest in a public limited company. Hence, improves capital of the company.
- More attention
Being listed on a stock market ensures that mutual funds, hedge funds and other traders take note of business of the company. This may result in better business opportunities for the Public Limited Company.
- Spreading risk
Since the shares are sold to the public at large the unsystematic risk of the market is spread out.
- Growth and expansion opportunities
Due to less risk, there is a perfect opportunity for growing and expanding the business by investing in new projects from the money raised through shares.
- After obtaining an approval from the ROC, the company should apply for the ‘certificate of business commencement.’
Documents required for incorporating a Public Limited Company
- Proof of identity of all the shareholders and directors
- Proof of address of all the directors and the shareholders
- PAN number of all the shareholders and directors
- Utility Bill of the proposed office i.e. proposed registered office for the company
- A NOC (No Objection Certificate) from the landlord where the office of the company will be situated
- Director Identification Number (DIN) of all the directors
- Digital Signature Certificate (DSC) of the directors
- Memorandum of Association (MOA)
- Articles of association (AOA)