Major Advantages of Public Limited Company
Separate Legal Entity
- A Company is a separate legal person and juristic person under the law. The company on its own can hold properties and is differs from its members and Directors. The Board of Directors of the Company can only authorised to manage the company, but they do not own the company entirely.
- The members and Directors of the Company posses limited liability and hence they will not be liable for the debts of the company. They are responsible and answerable but the personal assets of the members and directors are not involved in writing of debts for the company.
Flexible To Trade In Stock Exchange
- Unlike Private Limited Companies, a Public company has the flexibility of trading its shares in stock exchange and it is one of the greatest advantages for any company. Any company, whose shares has positive market in stock exchange then the company will have a great market value and the share value of the company tends to increase.
- A company being a juristic person, can acquire, own, enjoy and alienate, property in its own name. No shareholder can make any claim upon the property of the company so long as the company is a going concern.
- A company enjoys better avenues for borrowing of funds. It can issue debentures, secured as well as unsecured and can also accept deposits from the public, etc. Even banking and financial institutions prefer to render large financial assistance to a company rather than partnership firms or proprietary concerns.
- A company has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership.
- Shares of a company limited by shares are transferable by a shareholder to any other person. Filing and signing a share transfer form and handing over the buyer of the shares along with share certificate can easily transfer shares.
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