Advantages Of Public Limited Company

1. Raising Capital Through Public Issue Of Shares
The most obvious advantage of being a public limited company is the ability to raise share capital, particularly where the company is listed on a recognized exchange. Since it can sell its shares to the public and anyone is able to invest their money, the capital that can be raised is typically much larger than a private limited company. It’s also possible that having stock listed on an exchange could attract investment from hedge funds, mutual funds and other institutional traders.

2. Widening The Shareholder Base And Spreading Risk
Offering shares to the public gives the opportunity to spread the risk of company ownership among a large number of shareholders. This may allow early investors in the company to sell some of their own shares at a profit while still retaining a substantial stake in the company.
Obtaining capital from a wide range of investors has some advantages over relying on one or two “angel investors”, as many private companies will choose to do to facilitate growth. While an angel investor may provide a large amount of capital and expertise, the founders may not be comfortable with the level of influence over the company’s direction that the angel will often expect.

3. Other Finance Opportunities
As well as share capital, a public limited company will often find itself in a better position when looking at other potential sources of finance. The demands of being a public limited company and maintaining a stock exchange listing, for example, can help to improve a company’s creditworthiness when issuing corporate debt (and therefore reduces the return the company needs to offer investors). Banks and other financial institutions may be more willing to extend finance to a public limited company, particularly one that is listed. The company could also be in a better position to negotiate favorable interest rates and repayment terms on loans.

4. Transfer Ability Of Shares
The shares of a public limited company are more easily transferable than those in the private equivalent, meaning shareholders benefit from liquidity. If shares are quoted on a stock exchange, shareholders and potential shareholders will generally find it easier to transfer shares in the company – although the market still relies on willing purchasers and sellers being available.
The fact the shareholders are less bound to remain with the company can give them comfort – and may help the company by making people more willing to invest.
Without restrictions on transfer ability of shares that often apply in private companies, it’s also easier to deal with situations like a shareholder’s death, allowing shares to be transmitted in line with the terms of any will.

Here is a list of features that differentiate a public company from a private limited company:

Features	Private Limited Company	Public Limited Company
Minimum Members	2	7
Minimum Directors	2	3
Maximum Members	200	Unlimited
Minimum Capital	1,00,000	5,00,000
Invitation to Public	No	Yes
Issue of Prospectus	No	Yes
Quorum at AGM	2 Members	5 Members
Certificate for Commencement of Business	No	Yes
Term used at the End of Name	Private Limited	Limited
Managerial Remuneration	Can not exceed more than 11% of net profit	No Restriction
Statutory meeting (Mandatory)​	No	Yes