A Public Limited Company is a company form of organization consisting of at least 7 members. Promoters who are willing to induct a large number of shareholders or want to list their securities on the stock exchange usually prefer it. Therefore, there is no upper limit on the number of members, it can induct unlimited members into the company. Also, there is no requirement for minimum paid-up capital in the company.
A Public Ltd Company shall have a minimum of 3 directors on the Board. Additionally, a public company must add the words “Limited” at the end of its name. Moreover, the general public can acquire the shares or debentures of this company, and such securities are freely transferable.
Every shareholder of the company has the freedom to transfer shares to any other person. In addition, members have limited liability up to the unpaid amount of share capital towards banks/creditors.
Altogether, 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. However, public limited companies are subject to stringent compliance and disclosure.