Public Limited Company have some distinguished from Private Limited Company which are as below:
- There is no limit on maximum no of shareholder where as private limited company is restricted to maximum 200 shareholders/members.
- The minimum no of share holder to start public company is 7 whereas private limited company can be start with 2 shareholders/members.
- It can invite to general public to become member or shareholder of company.
- Shares of such company can be listed on stock exchange
- There is certain limits on payment to managerial remuneration whereas there is no such restrictions on private limited company.
- There are various other compliance that to be fulfilled by pubic company which are optional for private limited company.
Registration Process of Public Limited Company:
A public limited company have almost similar registration process as Private Limited Company,
however post incorporation there are lots of compliance have to be done which are not required in
case of private limited company.
Documents required for Registration of Public Limited Company:
As initial registration process is almost similar to private limited company hence documents required
will also be same as private limited company. However here documents of at least 7 shareholders and
3 directors will be required as this the minimum criteria to start private limited company.
Key Characteristics of Public Limited Company:
- Share of Public company can be transfer easily without any restriction. A Shareholder after filling certain forms can transfer their share to another person.
- A public limited company have better market value as compare to private limited company as its management are generally lying with independent persons.
- A public limited company is required to issue prospectus for inviting public for subscription.
- The minimum no of director shall be 3.
Following are the additional legal compliances that have to be compliant by a Public limited Company:
- Public Limited Company is compulsorily required to prepare cash flow statement
- The Auditor are required to rotate after certain period of time
- Director remuneration cannot exceed from prescribed limit
- Internal Auditor to be appointed if certain conditions are fulfilled
- Comply with guidelines of internal financial controls if certain conditions are satisfied