{"id":1398,"date":"2026-10-08T10:55:29","date_gmt":"2026-10-08T10:55:29","guid":{"rendered":"https:\/\/www.mylegalbusiness.com\/blog\/?p=1398"},"modified":"2026-10-08T11:03:12","modified_gmt":"2026-10-08T11:03:12","slug":"can-a-public-company-raise-funds-from-the-public","status":"publish","type":"post","link":"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/","title":{"rendered":"Can a Public Company Raise Funds From the Public"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Funding is a critical aspect of business growth. It enables a firm to undertake new projects, expand its operations, make asset acquisitions, pay off debts, enter into new territories, and even fulfill working capital needs. The first issue that arises in this context is whether a public company can raise funds from the public.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The simple answer to this question is that yes it can raise funds. Nevertheless, a public company cannot raise funds at any time as and when it pleases to do so. There are certain legal conditions and processes for such fund raising which are laid out in both the Companies Act, 2013 and SEBI regulations (in case of listed and public issuance companies).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This blog attempts to explain the process of public fund raising in simple terms.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#What_Is_a_Public_Company\" >What Is a Public Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Can_a_Public_Company_Raise_Funds_From_the_Public\" >Can a Public Company Raise Funds From the Public?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Ways_in_Which_a_Public_Company_Can_Raise_Funds\" >Ways in Which a Public Company Can Raise Funds<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Initial_Public_Offer_IPO\" >Initial Public Offer (IPO)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Why_do_companies_choose_an_IPO\" >Why do companies choose an IPO?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Further_Public_Offer_FPO\" >Further Public Offer (FPO)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Rights_Issue\" >Rights Issue<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Private_Placement\" >Private Placement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Preferential_Issue\" >Preferential Issue<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Public_Deposits\" >Public Deposits<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Important_Legal_Compliances\" >Important Legal Compliances<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Board_Approval\" >Board Approval<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Shareholder_Approval\" >Shareholder Approval<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Offer_Documents\" >Offer Documents<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#SEBI_Compliance\" >SEBI Compliance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Stock_Exchange_Requirements\" >Stock Exchange Requirements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#ROC_Filings\" >ROC Filings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Allotment_and_Return_of_Allotment\" >Allotment and Return of Allotment<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Advantages_of_Raising_Funds_From_the_Public\" >Advantages of Raising Funds From the Public<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Frequently_Asked_Questions_FAQs\" >Frequently Asked Questions (FAQs)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.mylegalbusiness.com\/blog\/can-a-public-company-raise-funds-from-the-public\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_a_Public_Company\"><\/span>What Is a Public Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A public company is a company that is not a private company and generally has the ability to raise capital from a wider group of investors, subject to the applicable legal requirements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A <a href=\"https:\/\/www.mylegalbusiness.com\/public-limited-company-registration.php\"><strong>public company<\/strong><\/a> may be listed or unlisted. This distinction is important because a listed company is subject to additional SEBI and stock exchange requirements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Being a public company does not automatically mean that it can freely invite the public to invest. The company must follow the prescribed procedure before making a public offer.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_a_Public_Company_Raise_Funds_From_the_Public\"><\/span>Can a Public Company Raise Funds From the Public?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Yes, a public company is allowed to raise money from the public through the issuance of securities like shares and some other types of securities depending on relevant legislation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, a firm can choose to sell its shares to investors through IPO. Investors buy shares and thus get to become stockholders of the company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, a firm needs to adhere to the provisions concerning approvals, disclosure, offering documents, pricing, allotment, and utilization of money raised.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Ways_in_Which_a_Public_Company_Can_Raise_Funds\"><\/span>Ways in Which a Public Company Can Raise Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A public company can raise funds through different methods, depending on its requirements and eligibility.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some common methods are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Initial Public Offer (IPO)<\/li>\n\n\n\n<li>Further Public Offer (FPO)<\/li>\n\n\n\n<li>Rights Issue<\/li>\n\n\n\n<li>Private Placement<\/li>\n\n\n\n<li>Preferential Issue<\/li>\n\n\n\n<li>Issue of debt securities<\/li>\n\n\n\n<li>Deposits, where permitted under law<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Each method has different eligibility conditions and compliance requirements.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Initial_Public_Offer_IPO\"><\/span>Initial Public Offer (IPO)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">An Initial Public Offer (Initial Public Offer) is one of the best known means of raising funds from the public.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">IPO occurs when a company offers its stocks to the general public for the very first time with the aim of listing the same in a stock exchange.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To illustrate, in case of an unlisted public company, which wishes to expand its business, but requires large sums of money, it might choose to do so through the IPO route.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This involves making necessary offer documents according to SEBI rules and Companies Act, 2013.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_do_companies_choose_an_IPO\"><\/span>Why do companies choose an IPO?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">An IPO can help a company:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Raise substantial capital<\/li>\n\n\n\n<li>Expand its business<\/li>\n\n\n\n<li>Improve its visibility and reputation<\/li>\n\n\n\n<li>Provide liquidity to existing shareholders<\/li>\n\n\n\n<li>Access the capital market<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">However, an IPO also involves significant regulatory, professional, disclosure, and compliance requirements.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Further_Public_Offer_FPO\"><\/span>Further Public Offer (FPO)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">An FPO is a public issue of shares made by a company that is already listed on a stock exchange.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The company may use an FPO to raise additional funds for expansion, repayment of debt, working capital, or other permitted purposes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unlike an IPO, the company is already listed before making the FPO.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The issue must comply with the applicable SEBI regulations and other legal requirements<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Rights_Issue\"><\/span>Rights Issue<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Rights Issue is an offering by the company to its current shareholders to buy new shares.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, let us assume that a shareholder holds 10% of the shares of a company. Then the company can give the right to this shareholder to buy some more shares, depending on their shareholding.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The difference between rights issue and public issue is that in rights issue the offering is mainly made to existing shareholders.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It helps a company raise money and at the same time keep the same percentage shareholding for their existing shareholders.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Private_Placement\"><\/span>Private Placement<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Private placement is another method of raising funds, but it is not the same as raising money from the general public.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under private placement, securities are offered to a selected group of identified persons rather than the public at large.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Companies Act, 2013 prescribes specific requirements for private placement, including restrictions on the number of persons to whom securities may be offered and requirements relating to offer letters, banking channels, allotment, and filing of prescribed forms.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, a company should not use private placement as a way of making a general public invitation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Preferential_Issue\"><\/span>Preferential Issue<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A preferential issue involves issuing shares or other securities to selected persons on a preferential basis.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, a company may issue shares to a particular investor, promoter, or strategic investor, subject to applicable legal requirements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Depending on the nature of the company and the issue, provisions of the Companies Act, 2013 and applicable SEBI regulations may apply.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Public_Deposits\"><\/span>Public Deposits<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A public company may also be able to accept deposits, but this is not an unrestricted method of raising funds from the public.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Acceptance of deposits is governed by specific provisions of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are several conditions relating to eligibility, limits, disclosures, deposit insurance where applicable, creation of security in certain cases, repayment, and filing requirements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, a company should carefully check whether it is eligible to accept deposits before doing so.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Important_Legal_Compliances\"><\/span>Important Legal Compliances<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">When a public company wants to raise funds, it must first determine the appropriate method of fundraising.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Depending on the method, important compliances may include:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Board_Approval\"><\/span>Board Approval<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Board of Directors generally needs to approve the proposed issue and related matters.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Shareholder_Approval\"><\/span>Shareholder Approval<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Certain types of issues may require approval of shareholders through an ordinary or special resolution, depending on the applicable provisions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Offer_Documents\"><\/span>Offer Documents<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">For a public issue, the company must prepare and file the required offer documents containing important information about the company, its business, financial position, risks, management, and the proposed issue.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"SEBI_Compliance\"><\/span>SEBI Compliance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Where SEBI regulations apply, the company must comply with the relevant SEBI requirements.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Stock_Exchange_Requirements\"><\/span>Stock Exchange Requirements<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A company seeking listing must comply with the requirements of the relevant recognised stock exchange.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ROC_Filings\"><\/span>ROC Filings<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Various forms and documents may have to be filed with the Registrar of Companies within the prescribed timelines.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Allotment_and_Return_of_Allotment\"><\/span>Allotment and Return of Allotment<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">After securities are allotted, the company must complete the prescribed allotment and reporting requirements.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages_of_Raising_Funds_From_the_Public\"><\/span>Advantages of Raising Funds From the Public<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Raising funds from the public can provide several benefits to a company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Large Amount of Capital<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A public issue can help a company raise substantial funds from a large number of investors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Business Expansion<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The funds can be used for expansion, new projects, acquisitions, technology, or other business requirements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Better Market Visibility<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A listed company generally receives greater public visibility and market recognition.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Reduced Dependence on Loans<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Equity fundraising can reduce the company&#8217;s dependence on traditional bank loans and other borrowings.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Improved Credibility<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A company that successfully completes a public issue may gain greater credibility among investors, customers, lenders, and business partners.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions_FAQs\"><\/span>Frequently Asked Questions (FAQs)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Q1. Can every public company raise funds from the public?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No. Being a public company alone does not mean that it can freely invite the public to invest. The company must satisfy the applicable legal and regulatory requirements for the particular type of issue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Q2. Can an unlisted public company raise money from the public?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yes, an eligible unlisted public company may raise funds through a public issue, subject to the applicable provisions of the Companies Act, 2013, SEBI regulations, and other requirements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Q3. Is an IPO compulsory for every public company?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No. A public company does not have to conduct an IPO merely because it is a public company. An IPO is required only when the company chooses to offer its securities to the public and seek listing, subject to applicable law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Q4. What is the difference between an IPO and an FPO?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An IPO is generally the first public issue of shares by an unlisted company seeking listing. An FPO is a further public issue by a company that is already listed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Q5. Can a public company raise funds through private placement?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yes, subject to the applicable provisions of the Companies Act, 2013 and, where applicable, SEBI regulations. However, private placement is made to identified persons and is not a public offer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Q6. Can a public company accept deposits from the public?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A company may accept deposits only if it satisfies the eligibility conditions and complies with the applicable provisions of the Companies Act, 2013 and the relevant rules. It cannot simply accept money from the public as deposits without following the prescribed requirements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Q7. Does a public issue require shareholder approval?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Depending on the nature and structure of the issue, shareholder approval may be required. The exact approval depends on the applicable provisions and the type of securities being issued.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Q8. What securities can a company issue to raise funds?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Depending on the applicable law and circumstances, a company may raise funds through equity shares, preference shares, debt securities, or other permitted securities.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Q9. Is SEBI approval required for a public issue?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Public issues of securities are subject to the applicable SEBI regulatory framework. The company must comply with the relevant SEBI requirements, along with the Companies Act and other applicable laws.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Q10. Can a private company raise funds from the general public?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Generally, a private company cannot make a public invitation to subscribe to its securities. If a company wants to raise funds from the public, it must consider whether conversion into a public company and compliance with the applicable requirements are necessary.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">While a public company has access to funds from the public, it is not possible for it to obtain the funds in a haphazard manner or without going through the due process of law. The company could choose an IPO, FPO, rights issue, private placement, preferential issue, debt instruments, or even deposits, wherever permissible, based on its need.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The key aspect is that all the above methods have their own eligibility criteria and processes to be followed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is important for the company to undertake an assessment of its requirement for funds and also make its mind about its objectives. Proper advice regarding this could assist the company in choosing the best fundraising route.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">ALSO READ<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mylegalbusiness.com\/blog\/how-to-check-company-name-availability-on-mca-portal\/\"><strong>How to Check Company Name Availability on MCA Portal<\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mylegalbusiness.com\/blog\/compare-public-limited-company-llp-and-pvt-limited-company\/\"><strong>Public Limited Company vs LLP vs Private Limited-Which Structure Is Right for You<\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mylegalbusiness.com\/blog\/how-to-apply-for-apeda-registration-through-dgft\/\"><strong>How to Apply for APEDA Registration Through DGFT<\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mylegalbusiness.com\/blog\/llp-closure-guide\/\"><strong>LLP Closure Guide<\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mylegalbusiness.com\/blog\/compare-public-limited-company-llp-and-pvt-limited-company\/\"><strong>Public Limited Company vs LLP vs Private Limited<\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mylegalbusiness.com\/blog\/minimum-members-directors-required-for-a-public-company\/\"><strong>Minimum Members &amp; Directors Required for a Public Company<\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mylegalbusiness.com\/blog\/public-company-registration-in-india\/\"><strong>Public Company Registration in India<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Funding is a critical aspect of business growth. It enables a firm to undertake new projects, expand its operations, make asset acquisitions, [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":1399,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[],"class_list":["post-1398","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-limited-company"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Can a Public Company Raise Funds From the Public<\/title>\n<meta name=\"description\" content=\"Read this article to know how a public company can raise funds from the public through IPOs, FPOs, rights issues, and other methods, along with SEBI rules &amp; more.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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