Types of Companies Private Company. This is the new amendment as per the Companies Act, 2013[1]. Public Limited company. It is generally formed by small businessmen who want to own a company but keep its affairs private. Public companies have the advantage of limited liability as well, which comes in handy in the event of bankruptcy or a lawsuit. When the company is not able to receive the 90 percent amount then they cannot continue with the business. A company that can own property on its own name. However, shares in a public company can be freely sold and traded to the general public and their shares can be listed on a stock exchange. Copyright © 2021 ENTERSLICE FINTECH PRIVATE LIMITED. You can learn more about what a limited company is and how it can benefit your business here: However in case of a public company, the Certificate of Incorporation as well as Certificate of commencement is required both. However, in the case of Private Limited Company, the minimum share capital requirement is Rs.1,00,000. These companies usually write PLC after their names. It states the main objectives of the companies that is, the main businesses which the company is going to undertake. The public limited company is a separate legal entity, and each shareholder is a part of it. A private limited company is not required to issue a statement of its company affairs as is the case in public limited companies. https://jilianconsultants.com/ PUBLIC LIMITED COMPANY As per Companies Act, 2013 A Public Company is a Company which is not a Private Company. Here are some major features/characteristics of a Public Limited Company: It can bring Initial Public offer (IPO) to raise funds and can become the listed company. Members– To start a company, a minimum number of 2 members are required and a maximum number of 200 members as per the provisions of the companies act 2013. How to Set Up a Credit Rating Agency in India? Well, in case if you want to start your own business, you have to regard in the further perspective all possible variations of your potential company specialisation. A Public Company requires a minimum share capital of Rs.5,00,000. The attraction point of the public company is that it can borrow from various sources. It continues till the company is not closed or liquidated. A company whose minimum paid up capital is Rs. It is also a public company in some Commonwealth nations. The shares can be acquired by anyone though initial … The main categories of difference are trading of shares, ownershipStockholders EquityStockholders Equity (also known as Shareholders Equity) is an account on a company's balance sheet that consists of share capital plus retained earnings. It is governed under the provisions of the Indian Companies Act, 2013. LPE firms tend to invest in these companies for a longer duration but there is no significant effect on the likelihood of taking these to public. Later, produce the scans of your documents: registration form, Memorandum and Article of Association (also called MEMART), a recognized form of identification, and evidence of payment to CAC and send them on docupload.cac.gov.ng. It is always considered an appropriate for the business which has a large amount of capital to invest. Features of a Private Limited Company. In a Private Limited Company requires the only certificate of incorporation to start the business, on the other side public company requires a … 2404.67 Billion. A private limited company is formed with a minimum capital of ₹1,00,000. It provides its members with liability protection and flexibility in terms of tax treatment and business operation. 'Marry two wives or get jail time.' A public limited company (PLC) is simply a limited liability company, similar to a private limited company, that has chosen to raise capital by offering shares to the general public. 1.3 CHARACTERISTICS OF A COMPANY The main characteristics of a company are : 1. Separate legal existence. These companies usually write PLC after their names. The minimum number of members in the public company required is 7 and for maximum there is no limit. A limited liability company (LLC) is one of the most common types of business entities among entrepreneurs and small business owners. While in the case of public company, this is an important document which has to be acquired by the public company before starting the business. Unlike the position of a sole trader, who themselves are the business, any type of limited company becomes its own legal entity, with associated assets and liabilities. Subscribe our Newsletter. Advantages of Public Corporation 3. Characteristics of private limited company is mentioned below. Minimum value of shares to be issued (in UK) is £50,000. Due to computerisation the process of registration looks simple, but you should mind the characteristics that your potential business should owe: The number of members should be from seven and more, so the overall number of participants is optional; The minimal quantity of directors is three and more; The liability of the shareholders/directors is limited to the extent of the shares owned by them. 5, 00,000. However, this document makes the company operations more manageable, and members feel more protected. Registration: A company comes into existence on registration under the Companies Act. It can issue shares (equity or preference) to the public. It offers shares to the public and has limited liability. There is limited liability for the shareholders. 15. The public limited company can issue prospectus for inviting the public to subscribe its shares. Characteristics of Company – 11 Essential Characteristics. It comes into being from the date mentioned in the certificate of incorporation. The business has separate legal entity. Constrained Liability implies the status of being lawfully capable just to a restricted sum for obligations of an organization. A public company will have the word 'limited' after the company name (usually abbreviated to Ltd). The company being subsidiary of a company, which is not being a private company it shall be a public company for the purposes of the act; Features of Public Limited Company. Limited companies which can sell share on the stock exchange are Public Limited companies. Public Limited Company is the legal designation of a limited liability company which has offered shares to the general public and has limited liability. Read our article:Difference Between Private and Public Limited Company. A private limited company is limited by shares or by guarantee. They have to file return with a declaration that no of members does not exceed 200 and no share capital or debenture is issued to the public. Characteristics of Public Limited Company . Because an LLC is separate from its owners, it can generally continue to exist and operate even after a member withdraws. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. The company can never come to an end. A Public Company is a legal entity that has separate identity from its shareholders/members. Log in REGISTRATION PORTAL and perform simple operations online: check the availability of your company name, complete a registration form and get ready to pay your fees. The biggest advantage of forming a public limited company (PLC) is that it grants the ability to raise capital by issuing public shares. Public limited companies have many of the characteristics of private limited companies with the key differences being that shares in a PLC are freely transferable. These differences have given a separate entity to public corporations. Advantages of Public Corporation 3. Shares of a public limited company are listed and traded at a stock exchange market freely. It is an incorporated association. This means that a shareholder of public limited company can easily transfer its shares to the public. A Public limited company has to file its Annual Report with the Registrar of the Companies. A private limited company is a separate legal entity formed under Companies Act, 2013. They are the members of the company. Incorporated association.A company is created when it is registered under the Companies Act. Public companies are publicly traded within the open market and a variety of investors. The public may buy and sell shares in them. It is easy to buy shares in the public company and so it is as easy to exit the public company. Similar to a corporation, it can buy and sell property, hire employees, bring lawsuits, and retain attorneys to defend itself. A private limited company cannot issue share warrants. A joint stock company may be incorporated as a private or public company or one person company. Also, note there is no such minimum requirement compulsion. It also represents the residual value of assets minus liabilities. A public limited company ('PLC') is a company that is able to offer its shares to the public. The minimum subscriber to the Memorandum of Association of Public Company has to be 7. Board of Directors: A public company is headed by a board of directors. Its dissolution too is governed by the state's law. Following are the various features of a PLC: Ownership: The ownership of a PLC lies with two or more shareholders who own the shares of the company. 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