As with a private company, the liability of the members of a public company is limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them.
A public company has a major advantage over a private company, in that it can offer its shares or debentures to the public, which a private company is prohibited from doing.
Because of this the public limited company is subject to a number of restrictions which do not apply to private companies.
The legal requirements include those that apply to a private company but the following issues will also need to be addressed:
- Certificate of trading
- Minimum capital requirement
- Greater financial disclosure
- Only 7 months to file accounts
- No financial assistance
- Requirements for company secretary