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A Public Limited Company is a type of company incorporated under the laws of Companies Act and is one of the most popular forms of business entities. It has shareholders with limited liability and its shares may be offered to the general public at large.

Unlike business entities such as a Sole Proprietorship and Partnership, it has a separate legal status from its shareholders and directors who have limited liabilities for the debts and losses of the company. It has the rights to own properties. It usually has the words 'Limited' at the end of its name.

Important Features of Public Limited Company

1. Formed and registered by complying with the prescribed formalities prescribed under the Act.

2. Legal person in the eyes of law distinct from is members

3. Separate Person having its own rights and obligations

4. Restriction on right of transfer of shares

5. Can sue or be sued in its own name

6. Enjoys the benefit of perpetual succession. Death or insolvency of shareholder(s) does not effect the continuity

7. Foreign Direct Investment is permissible

Basic Setup Requirements for Public Limited Company

1. Minimum 7 Shareholders + 3 Directors

2. Minimum initial paid-up capital is INR 500,000

3. A registered office address

4. Director Identification Number (DIN) and Digital Signature Certificate (DSC) for Directors

Tax and Public Limited Company

Indian Public Limited Company is considered a tax resident; it is therefore eligible for tax under Income Tax Act, 1961. Tax rate of 30% on the total income and surcharge of 5% if the income exceeds 10 Million plus 3% Education cess & Secondary and Higher Education cess on the total of income tax and surcharge.

Advantages

1. The shareholders have limited liability

2. A company can raise additional capital by issuing more shares or debentures

3. Greater borrowing power

4. A board of directors with experience/ expertise can be appointed

5. Shareholders can sell/transfer their shares freely

Disadvantages

1. There is a loss of overall ownership and control.

2. There are more statutory regulations to conform and comply to

3. Profits are shared amongst a far greater number of people

4. Public disclosure of the financial affairs is necessary

Our fees for incorporating a Public Limited Company is Just Rs. 5,000/-