Top 24 Features of Public Limited Company

The Public Limited Company is the most sought-after corporate form chosen by most businesses that are trying to raise their capital from the public at large. Following are some of the unique features offered by the company, which make the corporate form very attractive for large enterprises. 

PLC is governed by the provisions of the Companies Act 2013 in India. The shares of the company deal in the open market as well as trade on recognized stock exchanges. 

This blog covers all the important features of Public Limited Company for a better understanding of what are the advantages and features involved in it.

What is the Public Limited Company?

It is a form of business organization in which the public buys shares and trades shares on a stock market. Separate from its shareholders, a PLC has its own legal identity; it owns assets, makes and accepts contracts; and can independently sue or be sued. 

Shareholders have limited liability with a PLC. They will be liable for the company’s debts only up to the amount of their shares. 

Public limited companies must comply with more stringent regulatory and reporting conditions than private companies because public limited companies often raise their capital from the public through an initial public offering (IPO) to fund business activities or expansion.

If you want to see more about the public limited company then you can click on the below video

What are the Top 24 Features of a Public Limited Company?

We have written down all the features of public limited company names in an obvious way in front of you all and along with that the complete information of each feature is also written in detail:

1. Separate Legal Entity
2. Limited Liability
3. Ability to Raise Capital
4. Perpetual Succession
5. Transferability of Shares
6. Minimum and Maximum Number of Members
7. Mandatory Statutory Compliance
8. Board of Directors
9. Prospectus Issuance
10. Stock Exchange Listing
11. High Public Accountability
12. Dividend Distribution
13. Greater Access to Resources
14. One Person Company (OPC) Registration
15. Director Identification Number (DIN)
16. Registered Office Address
17. Borrowing Capacity
18. Brand Recognition and Reputation
19. Digital Signature Certificate (DSC)
20. Expansion Opportunities
21. Management Structure
22. Memorandum of Association
23. Regulation
24. Authorized Share Capital

Separate Legal Entity

A public limited company has a legal identity that is independent of and not subject to the name or identity of its owners and shareholders. The company can also enter into contracts, own property, and sue or be sued in its corporate name. Shareholders are liable for debts incurred by the firm, thereby providing some protection for personal assets.

Separate Legal Entity is the 1st feature among the Top 24 features of public limited company and also a very important one.

Limited Liability

One of the most relevant aspects of a public limited company is that its shareholders have limited liabilities. This aspect is essential because shareholders’ liability is only up to the amount they have invested in case of debts incurred by the company. Even when financial losses cause bankruptcy by this company, their personal assets are still protected.

Limited Liability is the 2nd feature among the Top 24 features of public limited company and also a very important one.

Ability to Raise Capital

Public limited companies have an advantage over the rest of the companies because they can raise a considerable amount of capital by listing shares to the public. Additionally, shares are readily available on a recognized stock exchange, so anyone can buy or sell shares. Therefore, it is relatively easy to attract more and more investors, and the company proliferates due to access to sufficient funds.

Ability to Raise Capital is the 3rd feature among the Top 24 features of public limited company and also a very important one.

Perpetual Succession

A public limited company carries its succession into perpetuity. Therefore, the existence of a public limited company is not affected by the change of its shareholders or even their death. It continues to exist as a legal entity despite the departure and entry of its shareholders, ensuring that it has long-term stability.

Perpetual Succession is the 4th feature among the Top 24 features of public limited company and also a very important one.

Transferability of Shares

The shares of a public limited company are very easily transferable. Such individuals can sell or transfer their shares to others without complicated formalities. This liquidity feature promotes investment as it enables shareholders to exit their investment when the need arises to do so.

Transferability of Shares is the 5th feature among the Top 24 features of public limited company and also a very important one.

Minimum and Maximum Number of Members

There must be at least seven members (shareholders) to form a public limited company. However, there is no legal limit to the number of shareholders in a public limited company. Thus, anyone can raise any amount of capital by issuing shares that can be subscribed to by any number of people, giving a public limited company an almost unlimited approach to large-scale investments.

Minimum and Maximum Number of Members is the 6th feature among the Top 24 features of public limited company and also a very important one.

Mandatory Statutory Compliance

Public limited companies have to follow extremely stringent regulatory and legal guidelines. They have to follow the rulebooks laid out in the Companies Act, Securities Exchange Regulations, and other government policies. This includes regular auditing, filing annual returns, and disclosing information about their financial activities—this increases transparency and accountability.

Mandatory Statutory Compliance is the 7th feature among the Top 24 features of public limited company and also a very important one.

Board of Directors

In a public limited company, governance is entrusted to a board of directors elected by the shareholders. The board oversees the company’s activities, makes strategic decisions, and ensures that operations are in line with legal and ethical norms. The director acts as a trustee and is accountable to the shareholders for any decisions.

Board of Directors is the 8th feature among the Top 24 features of public limited company and also a very important one.

Prospectus Issuance

A public limited company must issue a prospectus before offering its shares to the public. It is a report that gives a lot of information about its operations, financial position, and the risks involved in investing. It is legally mandatory, and building the trust and confidence of investors is a big deal in itself.

Prospectus Issuance is the 9th feature among the Top 24 features of public limited company and also a very important one.

Stock Exchange Listing

Shares of a public limited company are issued on recognized stock exchanges, which can be NSE or BSE in India. Being listed on a stock exchange gives the company a high level of visibility and credibility, making it easier to raise capital from the public.

Stock Exchange Listing is the 10th feature among the Top 24 features of public limited company and also a very important one.

High Public Accountability

Public limited companies are far more responsible because they have a huge number of shareholders and need the follow-up of set standards by regulatory bodies. Generally, such companies are bound to maintain a proper reporting culture on financial affairs, so their operations become more transparent. Consequently, investor confidence goes up, but the price to be paid by the company is more scrutiny.

High Public Accountability is the 11th feature among the Top 24 features of public limited company and also a very important one.

Dividend Distribution

Public limited companies can distribute the profits to the shareholders in the form of dividends. Dividends are not compulsory and are paid at the discretion of the directors because of profitability and investment in the future.

Dividend Distribution is the 12th feature among the Top 24 features of public limited company and also a very important one.

Greater Access to Resources

A public limited company has much bigger access to a pool of financial and human resources. It can raise funds not only through equity but also through debentures or bonds. Further, it can attract the best available talent due to its large scale, brand name, and attractive employment benefits.

Greater Access to Resources is the 13th feature among the Top 24 features of public limited company and also a very important one.

One Person Company (OPC) Registration

Even though a public limited company must have at least seven shareholders, businesses can start small as an OPC and change into a public limited company as they grow. This way, entrepreneurs can start small while laying the ground for later expansion into the public limited company.

One Person Company (OPC) Registration is the 14th feature among the Top 24 features of public limited company and also a very important one.

Director Identification Number (DIN)

Every director appointed to a public limited company is mandatorily registered with a Director Identification Number. A DIN is issued only to the directors registered with the company, and this unique identifier has been issued only to those who are now deemed responsible or monitored for regulatory purposes.

Director Identification Number (DIN) is the 15th feature among the Top 24 features of public limited company and also a very important one.

Registered Office Address

A public limited company must have a registered office address. This is the official communication address to which all legal and government correspondence will be posted. This does not need to be located at the registered office itself and, hence, can be anywhere in the country and need only be registered with the Registrar of Companies.

Registered Office Address is the 16th feature among the Top 24 features of public limited company and also a very important one.

Borrowing Capacity

Public limited companies can raise funds from a wide range of debt instruments like bonds and debentures besides share capital. This could be used to fund large-scale projects and expansions.

Borrowing Capacity is the 17th feature among the Top 24 features of public limited company and also a very important one.

Brand Recognition and Reputation

Public limited companies always have a great deal of brand recognition compared to private companies. The regular presence of such companies on the stock exchanges, and adherence to regulations also help in building up a good reputation among investors, customers, and stakeholders. The same brand value attracts new investors and business opportunities.

Brand Recognition and Reputation is the 18th feature among the Top 24 features of public limited company and also a very important one.

Digital Signature Certificate (DSC)

A Digital Signature Certificate is required to digitally sign important documents filed with regulatory bodies like the Ministry of Corporate Affairs by directors of a public limited company. DSC thus ensures safe, authentic document signing in online filings and thereby becomes an important part of corporate compliance.

Digital Signature Certificate (DSC) is the 19th feature among the Top 24 features of public limited company and also a very important one.

Expansion Opportunities

Public limited companies have easier expansion since they can raise capital from the public. Receivables of large-scale investments help fuel new ventures, acquisitions, and geographic or market expansions, and thus aid a company in increasing the scale of operations and market share.

Expansion Opportunities is the 20th feature among the Top 24 features of public limited company and also a very important one.

Management Structure

A public limited company has a defined management structure headed by a Board of Directors. Directors manage the day-to-day affairs of the company while ensuring compliance with all legal and regulatory aspects. Shareholders have the right to vote on key management decisions in order to provide checks and balances.

Management Structure is the 21th feature among the Top 24 features of public limited company and also a very important one.

Memorandum of Association

The Memorandum of Association is regarded as the very constitutive document for any public limited company. It is that document that provides the company with its object, powers, and scope of operations. Furthermore, it mentions the authorized capital of the company—a highly critical determinant for defining the extent of the financial structure of the company and future expansions.

Memorandum of Association is the 22nd feature among the Top 24 features of public limited company and also a very important one.

Regulation

Public limited companies fall under considerable and strict regulatory control from government bodies, stock exchanges, and securities regulators. In this respect, higher regulation leads to more transparency and protects the interest of the shareholders. Public limited companies have to abide by regulations like financial reporting, auditing, corporate governance, and compliance.

Regulation is the 23rd feature among the Top 24 features of public limited company and also a very important one.

Authorized Share Capital

Authorized capital is the utmost amount of capital that a public limited company is authorized to raise from issuing shares. The company cannot issue shares beyond this maximum without altering its MoA. It allows for clarity on the financial ceiling of the company and its equity-raising potential.

Authorized Share Capital is the 24th feature among the Top 24 features of public limited company and also a very important one.

If you want to see more about the features of public limited company then you can click on the below video

What is the Public Limited Company List?

Here are the total public limited companies list:

Public Limited Company List (Common Characteristics)

What are the Advantages of Public Limited Company?

If you want to know about the Advantages of Public Limited Company then you can click here to get a complete guide.

What are the Disadvantages of Public Limited Company?

If you want to know about the Disadvantages of Public Limited Company then you can click here to get a complete guide.

What are the Public Limited Company Examples?

Here are the total public limited companies examples:

Examples of Public Limited Companies

In Conclusion

Public limited companies offer numerous features. Some of the common features include easy access to capital, transferability of shares, and the usual limitation of liability.

However, they are highly rigid in terms of compliance and have high public accountability. Yet, despite all these, several large-scale enterprises still opt for these due to reasons of raising public funds for growth and expansion.

It has tremendous scope for expansion while protecting the interests of shareholders, thus constituting the preferred form of business for those who intend to invest in or set up large-scale enterprises.

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