Public Limited Company is a company form of organization consisting of at least 7 members. It is usually preferred by promoters who are willing to induct a large number of shareholders or want to list its securities on the stock exchange. There is no upper limit on the number of members, it can induct unlimited members into the company. Also, there is no requirement of minimum paid-up capital in the company
A Public Limited Company shall have a minimum of 3 directors on the Board. Also, a public company is required to add the words “Limited” at the end of its name. The shares or debentures of this company can be acquired by the general public and such securities shall be freely transferable. Every shareholder of the company has the freedom to transfer shares to any other person. The liability of members and directors is limited up to the unpaid amount of share capital towards banks/creditors.
Public limited companies are suitable for businesses that have a large requirement of capital, as it enables to raise money through the issue of shares to a large number of people. Issue of shares to the public is generally prohibited in a private limited company, OPC, LLP’s, etc. However, public limited companies are subject to stringent compliance and disclosure.