Question

Mr. Sankalp started a ready-made garments business with his younger brother in the year 2002. The business was then promoted in the form of a Private Limited Company. Over the years their business has grown exponentially and they are now planning to convert it into a Public Limited 3 Company. In the context of the above, what privileges will Mr. Sankalp have to forego if he converts his business into a Public Limited Company? (Any three)

Answer 1

Answer:

Followings are the Privileges of Public Limited over Pvt Limited:

Quick Share Transfer

Raise Capital

Greater Credibility

Explanation:

Here Mr. Sankalp have to convert his pvt ltd company into public ltd company.So there are no of privileges he will get by converting pvt firm into public ltd.

1. Quick Share Transfer:

By converting into public ltd company Mr. Sankalp can transfer his share quickly.

2.Raise Capital:

With the help share holder he can increase his capital because share holders are going to invest money in that company.

3. Greater Credibility:

Public limited companies have to disclose their audited statement of accounts, inform the regulatory bodies of any structural change, and hold annual general body meetings for all shareholders. Because of thus he can increase his credibility.