In India, there are three types of limited company: a public limited company, a private limited company, and a one-person company. A company’s liability may be limited by shares, in which case the liability of the company’s members is limited to the amount of the shares held by them, or it may be limited by guarantee, in which case the liability is limited to a predetermined amount the company’s members have agreed to contribute if the company is dissolved with outstanding liabilities. A private limited company is a limited company incorporated under the Companies Act 2013 (or one of its predecessor acts), with a minimum paid-up share capital (if any) of ?1 lakh (US$1,600), with an article that restricts the transfer of its shares; it may have between two and two hundred members, and its name ends with “Private Limited” (abbreviated Pvt Ltd). A public limited company must have a paid-up share capital of at least ?5 lakh (US$7,900), and at least seven members; its name ends “Limited” (abbreviated Ltd). A one-person company (OPC) is a private company with similar proprietorship and privileges to a private limited company, but with fewer requirements; this type of company may have only one director and member.
A limited company grants limited liability to its owners and management. Being a public company allows a firm to sell shares to investors this is beneficial in raising capital. A minimum of three Directors are required for establishing a Public Limited Company and it has more stringent regulatory requirements compared to a Private Limited Company.
Public Limited Companies are those types of companies where minimum number of members is seven and there is no cap on the maximum number of members. A public limited company has most of the characteristics of a private limited company. A public limited company has all the advantages of private limited company and the ability to have any number of members, ease in transfer of shareholding and more transparency. Identifying marks of a public limited company are name, number of members, shares, formation, management, directors and meetings, etc.,
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