What is a public limited company?
A Public Limited Company is a type of legal entity that has limited liability. Anyone can buy its stock, either privately or publicly through the stock market.
A Public Limited Company must be highly regulated and has to be vocal about its profit/loss, assets,
liabilities and other acquisitions to all its shareholders.
Characteristics of a Public Limited Company Directors
As per the Companies Act, 2013, you need at least 3 directors to start a public limited company.
There is no limit to how many directors can be on the board.
The liability of each shareholder is limited. A company’s stockholders are not personally responsible
for any loss or debts the company incurs up to the amount they invested in it. This is different from
partnerships and sole proprietorships, where the partners and business owners are jointly and
severally liable for the debts of the business.
However, this characteristic of a general public company does not mean that the shareholders are
immune. They can be held responsible for illegal actions.
A public company has to have at least 5 lakh of raise capital. That is the minimum paid up capital for
A prospectus is a statement about the company. You need to give this statement to people who want
to invest in the company. But there are no such statements for companies that are private. This is
because private companies cannot ask for money from people who might want shares in the prospects.
Name all public companies must add the word “limited” to their company name according to Company act, 2013.