Public limited company is creation of law and can be registered / incorporated as per the law and provisions contained in The Companies act 2013 and the rules made thereunder. Any seven person can open private limited company with no limitation to number of members in company. The minimum capital required to form a public Limited Company is Rs. 5,00,000. This form of business is suitable for large scale of business where the capital requirement is very high and the company is willing to obtain money from the public at large.
A Public limited company is symbolic of large organisations requiring huge investments and scale of operations. There is no restriction on the number of members which it can have at the same time it can raise funds from public at large by issuing public.
Distinct Legal EntityA legal entity like a company, has a separate identity from its owners or shareholders. With the embodiment of the company according to the law in force, a company becomes a distinct legal entity. In order to become a distinct legal entity, a company needs to be registered as a company under the Companies Act 2013.
Owning Property Like a person, a company can own property in its name too. Being a distinct legal entity, A Private limited company can own, enjoy and transfer its property rights to anyone. No claim can be made upon the property of the company by the shareholder as long till the time it exists.
Perpetual Existence Perpetual Existence refers to the continuation of an incorporated firm's existence. All Private Limited Companies have perpetual existence which implies that these firms are unaffected by the death of owner of the company or the transfer of its shares to a new establishment.The Best Part Of Prepatual Existence Is That A Comppany Will COntinue To Exist, No Matter How Many Directors, Officers And Shareholders Join Or Leave.
Limited LiabilityLimited Liability implies that the owners or shareholders of the company are not personally liable to pay the business debts. They are only responsible for the unpaid shares of the company. In order to reap the Limited Liability Benefit, owner needs to comply with certain corporate rules and regulations
Borrowing Capacity Not only the private limited companies receive great financial assistance from banks and financial institutions but also enjoys an advantage of borrowing funds. A private limited company can issue debentures apart from accepting deposits from the public.
Capacity To Sue And To Be Sued Private Limited Companies enjoy the advantage to carry out legal proceedings and to bring a suit in the court of law. Like an individual, the companies can bring a legal action in another person’s name and also can be sued in the court of the law as they are independent legal entities.
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