A limited company gives limited liability to its owners and management. Being a public company, the company gets permission to sell shares to investors, which is beneficial in raising capital. For establishment of a public limited company, at least three directors are required and there are more stringent regulatory requirements than private limited company. Public limited companies are those types of companies where the minimum number of members is seven and there is no cap on the maximum number of members. A public limited company has the highest characteristics of a private limited company. A public limited company has all the advantages of a private limited company and it is easy to transfer the capacity, shareholding and transparency of the members in any number. Identifying the marks of a public limited company is the name, number of members, shares, formation, management, directors and meetings etc.
ADVANTAGES OF LIMITED COMPANY
Separate Legal Entity
A company
established under a company act is a legal entity and a judicial person. That's
why the organization has a broad legal capacity as a company and can own the
property and also loan it. There is no liability for any company's creditors
for such loans to the members of the company (shareholders / directors).
Uninterrupted Existence
A company has
'evergreen succession', which is in continuous or continuous existence, unless
it is legally dissolved. Being a separate legal person, a company is unaffected
by the death or other departure of a member, but continues to exist in spite of
a change in membership.
Borrowing Capacity
A company gets
better opportunities to borrow money. It can issue debentures, can also be safe
and unsafe and accept deposits from the public. Even the banking and financial
institutions prefer to provide large financial support to a company rather than
partnership companies or ownership concerns.
Easy Transferability
Shareholders of a
company limited by shares to any other shareholder are transferable, depositing
the share transfer form and signing and sharing of shares with the sharing
certificate can easily be transferred from the share.
Owning Property
A company is a
judicial person, can get the property in his name, enjoy himself and can
separate himself. No shareholder can make any claim on the property of the
company unless the company is a concern.
Limited Liability
Limited liability
means the status of being legally responsible for a limited amount for a
company's debt. Contrary to ownership and participation, in the limited
liability company, the liability of the members in relation to the company's
debt is limited.
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