What is a Public Company?

1.	What is a Public Company?
Answer» Under Section 3 (i) (ii) of the Companies Act, a public company is a company which is not a private company. By implication, A public company is one which: (i)Has minimum seven people to commence it with no upper limit to membership. (ii)Does not restrict any transfer of shares. (iii)Invite public to subscribe for its shares, debentures and public deposits. (iv)Has a minimum paid up capital of five lakh rupees. (v)Uses the word ‘Ltd.’ at the end of its name.

Answer»

Under Section 3 (i) (ii) of the Companies Act, a public company is a company which is not a private company. By implication,

A public company is one which:

(i)Has minimum seven people to commence it with no upper limit to membership.

(ii)Does not restrict any transfer of shares.

(iii)Invite public to subscribe for its shares, debentures and public deposits.

(iv)Has a minimum paid up capital of five lakh rupees.

(v)Uses the word ‘Ltd.’ at the end of its name.

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