As per the Act a company is a company that is incorporated under the Act or any other previous statute. An artificial element created legally is called a company. It is a voluntary association of an individual or various individuals to gain certain profits and function with the earned capital amount or profits.

In simple words, a company is a lawfully created establishment formed by the alliance of various bodies, people, groups, or groups, etc., whose primary focus is to achieve a common goal/purpose.

The Companies Act could be defined as a company as a legally verified organisation with a common trademark easy to recognize, limited liabilities, and an independent legislative set of rules.

What is a public company?

A Public Company is a Company that has its shares of stock that are intended to be freely traded on the stock market exchange or publicly held company.

Although just a small number of shares are made initially available to each individual or any entity, the daily trading in the market determines the value of an entire firm.

Statistical studies tell us that many Public Companies were first Private Companies that later converted them to Public Companies to raise their per capita income keeping in mind all the regular requirements.

A Public Limited Company

A Public Limited Company is a company that has limited liabilities and can share its equity shares with the public to raise its finance.

A public limited company, or ‘PLC,’ is legally permitted to sell its shares to the general public. They are not obligated to offer public shares if they prefer not to, but the option is available if and when needed.

Advantages of a Public Limited Company

There are numerous benefits/advantages to forming a public limited company, particularly if you want to raise funds for your company. If your shares are quoted on a stock exchange, you can raise funds from new and current investors, and shareholders can purchase and sell their shares. Today every big firm is working as a corporation.

• Limited Liabilities for the shareholder.

• It is a Separate Legal Unit.

• Large Capital

• No restrictions on shares

• High status in the market.

• Ability to raise large amounts of capital.

• Easy to take loans from.

• More capital helps in the expansion of the company.

Disadvantages of a Public Limited Company

• Complicated legal formalities.

• More regulations and controls.

• Difficult to keep under control.

• Possibility of a takeover.

• Expensive to set up and operate.

• Management and administrative problems.

• Financial information is available to the public.

• The greater amount of rules and regulations.

Features of a Public Limited Company:

• The company exists separately, legally.
• Specific rules and laws govern the working of such companies.
• A minimum of seven members are required to run a Public Limited Company.
• The company’s finances are based on the shares bought by the people who indirectly become company members.
• The amount of capital earned by the company from people who buy and invest in the company’s shares is called share capital.
• The shares of a Public Limited Company are freely transferable without the company’s consent.
• There is limited Liability for the shareholder that depends on the number of shares they hold.
• Shareholders are not a part of all the daily internal happenings of the company, and they are just the mere shareholders of the firm.
• There is a separation in the ownership and management of the company.

Difference between a Public Company and a Private Company

Examples of Public Companies in India- Indian Oil, HDFC Bank, Tata Motors, ICICI Bank, Axis Bank, etc.

Conclusion

Public and private companies both play an important role in the professional world. Both have pros and cons. A public company is an essential key member in the stock market scenario where private companies do not play an important role to a greater extent.

If an individual wish to enter and start investing in the Stock Market, they must know about all the ups and downs of Public Companies and invest smartly.

Public Companies serve as a blessing to those new in the stock exchange market. It helps earn a good amount of money and attracts new people to be a part of the Stock Market scenario.