Public limited company 7 faq's

1. Starting a Public Limited Company 7 important things to know.

2. Q1. Why to form a public limited company rather than a private limited company? A. A public limited company ensures continuity of existence, and is also capable of working under a large amount of capital, which gives the opportunity of better growth. There is also a unity of direction and greater efficiency of management possible with a public limited company which is not the case with private limited company

3. Q2. What are the minimum and maximum number of members required in a public limited company ? Minimum number of members in a public company is 7 while there is no restriction in maximum number of members in a public company.

4. Q3. What is the minimum paid up capital required for public company ? A . The minimum paid up capital limit for a public company is 5 lakhs

5. Q4. Capital raising for a public company, How to deal with the problem? A. The Company collects its capital by the sale of its shares and those who buy the shares are called the members. The amount so collected is called the share capital. The shares of a public limited company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.

6. Q5. When can the company commence its business? After obtaining the certificate of commencement of business a public company can start its business.

7. Q6. What are the provisions for appointment and retirement of directors? S . 255 and S.256 of the companies act speak about directors, in a public company directors separately are appointed by separate resolution whereas for retirement at least 2/3 rd number of directors must retire by rotation at each general meeting. Also according to S.232 there must be at least 3 directors in a public company.

8. Q.7. Public Limited Company, What does the word limited signify? Limited company signifies that the liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.

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