The Company is a Public Limited Company which is incorporated under companies Act and has minimum paid-up capital of Rs. 5 lakhs. In a public limited company, minimum number of shareholders is 7 and minimum number of director is 3. A public limited company can offer its share in open market. Its shareholders have limited liability toward its debt and loans. It usually has the words 'Limited' at the end of its name. It is also a popular form of business entity. Under the Companies Act, 1956, a Public limited company has the following characterises:
- A separate legal entity
- Minimum number of shareholders is 7. There is no upper limit on maximum number of shareholders.
- Minimum number of directors is 3.
- A public limited company can issue its shares in public through initial public offer.
- Shareholders can sell/transfer their shares freely.
- A public company can accept deposits from public subject to the compliance of the Companies Act and other regulations.
- Operations of public limited companies are subject to compliance of many restrictive provisions of the Companies Act.
- Foreign Direct Investment is permissible.