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Public Limited Company Formation in India

A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The liability of each shareholder is limited to the degree of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager of such a Company can be unlimited at times.

A public limited company is a company, which is able to offer its shares to the public. It must include the words "public limited company" or its abbreviation "plc" at the end as part of its legal company name, which is able to trade on the stock market but in order to gain plc status the company must achieve the following:
  • Minimum share capital of Rs. 5 Lakhs.
  • Minimum of Three directors.
  • Its name must contain private limited company.
  • Secure a trading certificate from the Companies House.

These are the following steps to form a public limited company in India:
  • A minimum of seven members are required to form a public limited company.
  • It should have minimum paid-up capital of Rs 5 lakhs.
  • There is no restraint on maximum number of members.
  • The shares allotted to the members are liberally transferable.
  • These companies can raise funds from general public through open invitations by accepting fixed deposits and selling its shares.
  • These companies are needed to write either 'public limited' or 'limited' after their names.

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