Public Limited Company should be the preferred choice of business
in India if you are planning to raise funds from the general public through
Initial Public Offering (“IPO”) because public limited companies have got
privileged under Securities Laws to access capital market. Public Limited
Companies in India are considered to be a more transparent business model as
compared to other business structures.
It gives investors
a choice of transferring their ownership in the company without any hassle by
just selling the shares. Public Limited Companies in India are a destination
point for Foreign Direct Investment (“FDI”), because, under Foreign Exchange
Laws, there are the areas open for public limited companies to attract foreign
loans and equity participation.
A Public Limited Companies have following
features:
1)
It allows a significant degree of separation between operations and ownership.
2)
One can provide stock ownership or ESOPS to employees. Only Limited companies
are allowed to offer this feature of distributing their stocks among current
and prospective employees.
3)
Only Public Limited Companies can list
its shares on Indian Stock Exchanges such as National Stock Exchange (NSE),
Bombay Stock Exchange (BSE) and so on.
4)
Only Public Limited Companies can accept Deposits from public under Companies
Act, 2013.
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