What are the public limited company disadvantages?
Going Public - Disadvantages Profit-sharing If the firm is sitting on a highly successful venture, future success (and profit) has to be shared with outsiders. After the typical IPO, about 40% of the company remains with insiders, but this can vary from 1% to 88%, with 20% to 60% being comfortably normal. Loss of Confidentiality A major reason why firms resist going public is the loss of confidentiality in company operations and policies. For example, a company could be destroyed if the company were to disclose its technology or profitability to its competitors. Reporting and Fiduciary Responsibilities Public companies must continuously file reports with the SEC and the exchange they list on. They must comply with certain state securities laws ("blue sky"), NASD and exchange guidelines. This disclosure costs money and provides information to competitors. Loss of Control Outsiders are often in a position to take control of corporate management and might even fire the entrepreneur/company founder. While there are effective anti-takeover measures, investors are not willing to pay a high price for a company in which poor management could not be replaced. IPO Expenses An IPO is a costly undertaking. A typical firm may spend about 15-25% of the money raised on direct expenses. Even more resources are spent indirectly (management time, disruption of business). Immediate Cash-out Usually Not Permitted Typically, IPO entrepreneurs face various restrictions that do not permit them to cash out for many months after the IPO. Liability The company, its management, and other participants may be subject to liability for false or misleading statements and omissions in the registration documents or in the reports filed by the company after it becomes public. In addition management may be subject to law suits by the stockholders for breaches of fiduciary duty, self dealing and other claims, whether or not true.
The only social responsibility of a company should be to deliver a profit to its shareholders.?
The 'only'? No. Businesses need to be good neighbors just like people need to be good neighbors. I wouldn't be a good neighbor if I set up a hog pen next to my neighbor's house and let the run off flush into his driveway and yard. So I would never do that. And neither would a business that wants to be successful. Despised businesses are rarely successful. Businesses recognize that 'good will' and the good neighbor policy is as good for business as a good marketing campaign. So there is that. But beyond that, business has no more 'social responsibility' than anyone else.
Can a private limited company be listed on stock exchange in India ?
Well The answer may seem shocking but ..YES a private limited company can list ONLY its Debt securities on stock exchanges in india.As companies act 2013, Section 2 (52) ―listed company means a company which has any of its securities listed on any recognised stock exchange;Any of its Securities includes debt instruments.And Such Companies are called Private Debt listed companies or private listed companies.Also as per SECURITIES AND EXCHANGE BOARD OF INDIA(ISSUE AND LISTING OF DEBT SECURITIES) REGULATIONS, 2008:Section 2(1)(f) "issuer” means any person who makes an issue of debt securities in terms of these regulations or who has made an issue of debt securities which are listed on a recognized stock exchange and includes a person who seeks to list its debt securities on a recognised stock exchange.This means that if a private limited company has its debt securities listed on any recognised stock exchange, then such company is under the ambit of listed company category for complying with the Companies Act, 2013 and the rules and regulations made thereunder.
What is a public limited company?
A public limited company is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Its main features are :-The company has a separate legal existence apart from its members who compose it.A company must have a minimum of seven members but there is no limit as regards the maximum number.The company collects its capital by the sale of its shares and those who buy the shares are called the members. The amount so collected is called the share capital.The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.Legalraasta can help you with any kind of legal services. It provides a quick and affordable services.
Can I open my own private limited company while working in other private limited company as employee.?
A2AThere is nothing that limits you as such in registering a company. You might even want to start with a sole proprietorship (cheapest) and then later on incorporate with a Pvt.Ltd. once you know the full scope of your activities and the degree of liability you have in your business operations. But that is up to you. If you want to start a Pvt. Ltd then do it. However, what you want to do is study your employment contract. Some have terms that allow you to do some side work, or some contracts have also stiff clauses regarding competition that once you leave the company and do work that these clauses might hinder you for the first 6 months or longer. I doubt you have it, but just so you know in case you plan to take clients with you. Also, anything which is not regulated in a contract, standard Indian law applies. So you might want to look up on the internet if there are any peculiars regarding employment in India that we Europeans don't know about.Also, anything in terms of intellectual property and what you learn in the company is owned by your previous employer. So you might want to be careful and keep things separate. Your employer cannot stop what is stored in your brain, but simply the direct use of intellectual property or previous knowledge that could come to a direct disadvantage to your employer from you leaving the company is a sensitive area where you need to be careful. In summary: 1. Yes you can start a company and do whatever you want in your free time. 2. Check for any clauses in your contract. Problem comes only when you do something on company time.As long as you keep everything separate, you should be fine! Once you leave the company, try to do it on good terms by giving them notice and helping them.This is not legal advice! Any additional circumstance or issues that are not clear please consult an indian lawyer in labor law.
How do ESOPs work for a company which is not listed yet at any stock exchange or like for a startup? How can an employee redeem that shares if they are not traded in the open market?
Shares acquired through private stock option plans are almost certainly restricted securities. So the liquidity is typically limited to company redemptions, the M&A exit, authorized secondary investors, or become freely redeemable through the IPO process. I can tell from your tone that the lack of liquidity makes you view these shares as undesirable. What you should consider is the appreciation potential for great startup companies is extraordinary. The number of shares you can get is typically very high compared to working for a public company and the exercise price to acquire is a tiny fraction as well. For example, a brand new startup company often has a total capitalization value of less than $10 million. A great public company may have a capitalization of $100 billion. For that public company to even double in value, it has to acquire a lot of new business to raise its value by another $100 billion. In contrast, the new startup is 10,000 times smaller. If that startup becomes the next $100B public company, your gain in value will be extraordinary. Nevertheless, if you can't stomach the idea of investing in an illiquid stock since the average startup takes over 8 years to exit then you can contact ESO Fund Homepage (Employee Stock Option Fund) to have someone else finance the risk for you on a non-recourse basis. It would be a shame for you to forego the opportunity to work at a great startup because of this concern.
How does the french health system work?
What happens if you don't physically have the money to pay your bills? I know that, when we were in a car crash about 15 years ago, the French hospital sent our bill to our insurance company (travel insurance, that is) and they paid it