Advantages of a Public Company

By definition, it is visible that any limited company presents a limited liability to its owners and the management. It is beneficial since it is a Public Compy as it permits a firm to sell shares to investors which further helps to generate capital. There are many other benefits attached to Public Company registration and they are as follows;

Distinct Legal Entity

This is similar to the Limited Liability companies in which the company is a legal object and a juristic person authorized under the Act. Hence, a company form of organization enjoys legal capacity and can own property and also acquire debts. They are kept separate from the members (Shareholders/Directors) of a company & they have no liability towards the creditors of a company for such debts.

Continuous Existence

Until the Company is legally dissolved it has a 'perpetual succession' which means uninterrupted existence. Since a Public Company is a separate legal entity it is not affected by the death or retirement/removal of the members involved with the Organization.

Taking Finance

A Public Company has much more avenues to borrow funds from the banks. Another important benefit is that it can issue debentures who can be secured or unsecured. Being a public Company it has the right to accept funds from Public, etc. The banks and other financial institutes prefer to invest a huge sum of money to the public Company instead of spending on Partnership or Proprietary firms.

Flexible to Transfer Shares

The Public Company is given the right to transfer shares of a company wherein the shareholder can transfer the share to any other person. It is a simple process in which a filing and signing a share transfer form is required and then the share can be handed over to the buyer of the shares once he gets the share certificate.

Owning Rights

Since the company is a distinct legal entity and a juristic person, it has the right to acquire, own, and divide, property in its own name. A Shareholder or any person involved in the company cannot claim upon the property of the company as long as the Company is running.

Limited Liability

Like Private Limited and LLP , the Public Company also has Limited Liability which means the shareholders and members are legally responsible only to a limited amount of debts in the company.


 
 
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