Public Limited Company
Public Limited Company is a company that has limited liability and offers shares to the general public.
Benefits of Public Limited Company
- More capital
- Spreading risk
- Growth and expansion opportunities
- More attention
- Taxation Aspect on LLP
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What is Public Limited Company
Public Limited Company is a company that has limited liability and offers shares to the general public. Its stock can be acquired by anyone, either privately through (IPO) initial public offering or via trades on the stock market.
Advantage of LLP
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More capital
Shares are offered to the general public at large i.e. anyone can invest in a public limited company. Hence, improves the capital of the company
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Spreading risk
Since the shares are sold to the public at large the unsystematic risk of the market is spread out.
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Growth and expansion opportunities
Due to less risk, there is a perfect opportunity for growing and expanding the business by investing in new projects from the money raised through shares
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More attention
Being listed on a stock market ensures that mutual funds, hedge funds and other traders take note of the business of the company
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Taxation Aspect on LLP
For income tax purpose, LLP is treated on a par with partnership firms. Thus, LLP is liable for payment of income tax and share of its partners in LLP is not liable to tax. Thus no dividend distribution tax is payable. Provision of ‘deemed dividend’ under income tax law, is not applicable to LLP. Section 40(b): Interest to partners, any payment of salary, bonus, commission or remuneration allowed as deduction
Requirements for Registration of a Public Limited Company
- Minimum 7 shareholders are required to form a public limited company
- Minimum of 3 directors is required to form a public limited company. A minimum share capital of Rs. 5 lakhs is required
- Digital signature certificate (DSC) of one of the directors is needed while submitting self-attested copies of identity and address proof
- Directors of the proposed company will need a DIN
- An application is required to be made for the selection of the name of the company
- An application comprising the main object clause of the company is to be made. This object clause will define what a company will pursue after its incorporation
- Submission of the application to ROC along with the required documents like MOA, AOA, duly filled Form DIR – 12, Form INC – 7 and Form INC – 22 is needed
- Payment of the prescribed registration fees to the ROC is required. After obtaining approval from the ROC, the company should apply for the ‘certificate of business commencement
