2. Q1. Why to form a public limited
company rather than a private
limited company?
A. A public limited company ensures continuity of existence, and is
also capable of working under a large amount of capital, which
gives the opportunity of better growth. There is also a unity of
direction and greater efficiency of management possible with a
public limited company which is not the case with private limited
company
3. Q2. What are the minimum and
maximum number of members
required in a public limited
company?
Minimum number of members in a public company is 7 while there is
no restriction in maximum number of members in a public company.
4. Q3. What is the minimum paid up
capital required for public
company?
A. The minimum paid up capital limit for a public company is 5 lakhs
5. Q4. Capital raising for a public
company, How to deal with the
problem?
A.The Company collects its capital by the sale of its shares and
those who buy the shares are called the members. The amount so
collected is called the share capital. The shares of a public limited
company are freely transferable and that too without the prior
consent of other shareholders or without subsequent notice to the
company.
6. Q5. When can the company
commence its business?
After obtaining the certificate of commencement of business a
public company can start its business.
7. Q6. What are the provisions for
appointment and retirement of
directors?
S. 255 and S.256 of the companies act speak about directors, in a
public company directors separately are appointed by separate
resolution whereas for retirement at least 2/3rd number of directors
must retire by rotation at each general meeting. Also according to
S.232 there must be at least 3 directors in a public company.
8. Q.7. Public Limited Company, What
does the word limited signify?
Limited company signifies that the liability of a member of a
company is limited to the face value of the shares he owns. Once
he has paid the whole of the face value, he has no obligation to
contribute anything to pay off the creditors of the company.
