Public Limited Company Registration
Incorporating a Public Limited Company is a suitable option for large scale businesses that require huge capital. There should be a minimum of 7 members for starting a Public Limited Company.
What is a Public Limited Company?
Section 2 (71) defines a public company under Companies Act 2013, as a company which is not a private company and has the minimum paid-up capital of Rs 5 Lakhs. A PLC is owned by the members which must be minimum 7 in number. Moreover, all the acts of members of the public entity are guided by the Memorandum of Association (MOA) and Articles of Association (AOA).
The Public Limited Company registration, first of all, requires a minimum composition of 7 members and 3 directors. However, the maximum number of directors can be 50, and the maximum number of members is unlimited for the registration of public limited company. The PLC also has limited liabilities for its members and has rights to issue its shares to the general public for raising the capital of the company. For the purpose of public ltd. company registration, the company which is a subsidiary of a public entity shall also be deemed to be public even where such subsidiary company continues to be a private company in its articles.
Benefits of Public Limited Company Registration
- Separate Legal Entity
- A Public Limited Company is considered as a separate legal entity from its shareholders. It has a perpetual existence and can have its own PAN, bank accounts, approvals, contracts, licenses, assets and liabilities.
- Multiple avenues of funding
- Public Limited Company can raise funds from individuals as well as from financial institutions. The funds may be raised via equity shareholding, preference shareholding or debentures.
- Easy transferability of shares
- This is one of the biggest advantages of a Public Limited Company. The shares can be easily transferred by a shareholder to other legal entities – be it an individual or an organization, in India or abroad. The directorship of the company can also be changed for ensuring business perpetuity.
- Limited liability
- The shareholders of a Public Limited Company are given Limited Liability Protection. In a situation of unexpected liability, the same would be limited only to the company and not affect the shareholders.
Process of Public Limited Company Registration in India
- Fulfilling all the Legal Requirements for Incorporation
- First off, it is necessary that the legal requirements of minimum-paid up share capital, number of directors, number of shareholders, have been identified and fulfilled. Only if this step is complete, further steps of registration can be implemented.
- Obtaining DIN and DSC for all the Proposed Directors
- Once it has been established who all would be the directors of the company, their DIN from the Ministry of Corporate Affairs and DSC from the Certified Authority has to be obtained.
- The directors can only be individuals and not entities like LLPs or Financial Institutions. Also, the number of directors cannot exceed 50. It is not necessary for the Director to be the Shareholder of the Company
- Registered Office
- It is necessary to have a proper address to be recognized as the Registered Office of the Company. The Registered Office address has to be registered with Registrar of Companies (ROC) under whose jurisdiction the office location falls. All the correspondence related to business are made to the Registered Office by the ROC. The fee for registration shall be dependent on the authorized capital of the company.
- Application for Company Name
- Prior to the registration procedure, the name of the Company has to be approved by the ROC. It is mandatory that the name of the Public Limited Company ends with the word “Limited”. This application is filed in the RUN form of the Ministry of Corporate Affairs. It is better to provide a list of names in order of preference, in case a particular name is not available.
- Execution of Company Registration Documents
- Once the name of the Company has been approved, the crucial documents of the Company – MoA and AoA have to be executed. These documents have now gone electronic and can be prepared and submitted there itself. (eMoA: INC33 & eAoA: INC32)
- Submission of Documents to ROC
- Once all the documents have been prepared, they are submitted to the ROC for verification.
- Registration and COI
- Upon proper verification of all the submitted documents, the ROC registers the company and issues a Certificate of Incorporation along with the CIN (Corporate Identification Number) of the Company.
- Certificate of Commencement of Business
- A Public Limited Company cannot start its business immediately upon receiving the COI. It has to apply for Certificate of Commencement of Business within 180 days of receiving the COI, stating that all the subscribers have paid the subscription money.
Requirements for Public Limited Company Registration
According to the provisions of Companies Act, 2013 here are the requirements you need to fulfill to incorporate a Public company in India:
- The proposed company must have a minimum number of 7 shareholders
- The proposed company must have a minimum number of 3 directors
- No minimum capital required
- At least one director should have a Digital Signature Certificate
- All the directors need to have a DIN
- Memorandum of Association and Article of Association.
- After approval from Registrar of the Companies, the proposed public company has to apply for the “Certificate of Business Commencement.”
Documents Required for Public Limited Company Registration
- Identity Proof such as Aadhaar card, PAN card, Driving License, Voter Id of all the designated directors and shareholders.
- Address Proof of all the proposed directors and shareholders of the company.
- PAN card details of all the directors and shareholders
- Utility bill such as telephone, gas, water or electricity bill of the registered office as a residential proof of the business place. It should not be older than 2 months.
- A NOC or No Objection Certificate from the landlord of the business place.
- DIN or Directors Identification Number of all the designated directors
- DSC or Digital Signature Certificate of the designated directors
- Memorandum of Association (MOA) and Article of Association (AOA)
Comparison of Company Structures
|Particulars||Public Limited Company||Private Limited Company|
|Members||Minimum: 7, Maximum: No Limit||Minimum: 2, Maximum: 200|
|Directors||Minimum: 3||Minimum: 2|
|Minimal Capital Income||No||No|
|Issuance Of Prospectus||Required||Not Required|
|Name Differences||Must have “Limited” at the end of its name||Must have PVT LTD at the end of its name|
|Mandatory Statutory Meeting||Yes||No|
|Managerial Remunerations||There are no as such restrictions||Cannot exceed the limit of 11/% of the net profit|
|Stock Exchange||Is listed on stock exchange and stock trade is carried out publicly.||Not listed on stock exchange neither carry out stock trade publicly.|