A public limited company is a voluntary association of members. Therefore, after incorporation, it has a separate legal existence and the liability of whose members is limited. It must have a minimum of seven members but there is no limit as regards the maximum number. The shares of a company are freely transferable. Additionally, any shareholder can do this without the prior consent of other shareholders or without subsequent notice to the company. The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.
Continuity of existence
Larger amount of capital
Unity of direction
Scope for promotional frauds
Scope for directors for personal profit