Incorporation of Public Limited Company in India

Incorporation of Public Limited Company in India

The formation of a public limited company (PLC) is almost identical to that of a private limited company, with the primary differences being the minimum requirements of three directors and seven members. A PLC offers limited liability to its owners and management, which is a significant advantage. One of the main benefits of a PLC is its ability to raise capital by selling shares to the public. Additionally, a PLC has the option to list on recognized stock exchanges in India and issue an initial public offering (IPO). Shares of a PLC are freely transferable without any restrictions, and there is no limit on the number of members or shareholders. However, a PLC must adhere to additional Registrar of Companies (ROC) compliances and core compliances with the stock exchange and the Securities and Exchange Board of India (SEBI) if it is listed. Consequently, the compliance costs for a PLC are higher compared to a private limited company. Despite these higher compliance costs, entrepreneurs often prefer to incorporate a PLC due to its numerous advantages.