Advantages of registering to a Public Limited Company in India

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Advantages of registering to a Public Limited Company in India

What is a Public Limited Company? A Public Limited Company or better known as a PLC, is a business organization owned by its shareholders. It is the largest corporate structure any business person can subscribe to in India. Along with Limited Liability, the Public Company corporate model offers a ton of benefits to its members and shareholders. If you wish to apply for the Public Limited Company formation, you can avail of Company Incorporation services at Registrationwala. 

But company registration is not the only case in which a person can subscribe to the Public Company model. Many existing company structures also opt for a company conversion procedure to revitalize themselves as a Public Limited Company in the Market. In this article, we have discussed some of the features of a PLC as well as the benefits of conversion of Private to Public Company in India. So, please read it for your reference. 

Key Features of a Public Limited Company in India

Following are some of the defining features of a Public Limited Company (PLC) in India:

• In a PLC, each member has Limited Liability, i.e., PLC’s shareholders' Liability is limited to the amount invested in the Company.
• Shareholders are not liable for the debts and obligations of the PLC.
• PLC can issue shares to the public. A PLC can be listed on a stock exchange. General Public can buy its shares and sell as per their needs.
• A PLC must maintain a minimum of seven shareholders for the Company formation procedure.
• A PLC must maintain its minimum share capital equivalent to £50,000 in Indian rupees.
• The shareholders must elect the Board of Directors to make decisions on Company’s behalf.
• A PLC must submit its financial statements annually and be audited by its appointed Auditor. It must also comply with regulations relating to accounting as well as corporate governance.
• Lastly, a PLC can perpetually exist as it continues to exist after the updation in the shareholders list change or Company’s ownership 

Benefits of converting to a Public Limited Company in India

Of all the company structures in India, the Private Limited company is the model which most opt for public limited Company conversion. The MCA operational directives in a Private Limited Company restrict share transferability among her exclusive members and stakeholders. Opening shares to the general public is not allowed, which hinders the business growth of the PLC as it limits the possibility of fundraising from the general masses. For such reasons, A Private Limited Company opts for Public Limited Company conversion. Such a conversion gives several benefits to the Company. We have some of the Private to Public conversion benefits for your reference.

Ease in Raising Funds

A Company that has gone public can raise funds from the General Public. They can issue the Company's shares to the masses. In such a manner, a Public Company can easily raise major capital than other business structures.

An Established persona in the Market

If you convert into a Public Limited Company, then the Business's image gets improved. Also, its reputation in the public's eyes burgeons leads to better brand recognition and trust among the public.

Potential for Exponential Growth in the Market

A Publicly listed Company has more growth opportunities than a privately limited company because it raises funds through IPOs. i.e., Initial Public Offerings. An otherwise private company can also pot for mergers and acquisitions procedures to expand into a public Business.

More Engagement with Investors and Venture Capitalists

As a listed Company, A Public Limited Company must comply with major regulations as well as disclosure requirements. This disciplined behavior makes the Business Investors want to engage with them as they see an opportunity for mutual growth and build better relations.

More Fame, so more Game

A Public Company has better exposure to the general public. Company post-public conversion has better visibility. This increased publicity leads to better marketing opportunities.

Flexible terms for Shareholders

A PLC’s shareholders can sell their shares on any Indian Stock Exchange. This will allow the shareholders better exit opportunities as well as liquidity.

In all, businesses seeking to register or convert themselves into a Public Limited Company in India can ripe multiple benefits from the such procedure, such as ease in capital raise & increased growth opportunities. To learn more about the Public Limited Company registration & conversion procedure, connect with the Incorporation Team at Registrationwala.

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