A limited company grants limited liability to its owners and management. Being a public company allows a firm to sell shares to investors this is benificial in raising capital. A minimum of three Directors are required for establishing a Public Limited Company and it has more stringent regulatory requirements compared to a Private Limited Company.
Public Limited Companies are those types of companies where minimum number of members is seven and there is no cap on the maximum number of members. A public limited company has most of the characteristics of a private limited company. A public limited company has all the advantages of private limited company and the ability to have any number of members, ease in transfer of shareholding and more transparency. Identifying marks of a public limited company are name, number of members, shares, formation, management, directors and meetings, etc.,
Shares are offered to the general public in a big way i.e. one can invest in a public limited company. Therefore, the capital of the company improves.
Listing on the stock market ensures that mutual funds, hedge funds, and other traders focus on the company’s business. This may result in better business opportunities for a public limited company..
Since shares are largely sold to the public in the market, there is an increased risk of uncertainty in the market.
Due to low risk, the funds raised through shares are the right opportunity for businesses to grow and expand by investing in new projects.
As a result of appearing on the stock market, people will be able to easily and quickly recognize the company’s brand or name. The more brand recognition and capital a company has, the more business it will have.
© 2019 eVakil. All rights reserved | Design by insight infosystem insightinfosystem