Ashish Garg & Associates Public Limited Company

Public Limited Company

Public Limited Company Registration

What is a Public Limited Company?

A Public Limited Company (PLC) is a business entity that is registered under the Companies Act, 2013, and whose shares can be freely traded on the stock market. It is a company that can offer its shares to the public and is required to meet specific regulatory requirements and standards. A PLC typically has a larger scale of operations, access to more capital, and greater public accountability than private companies. It is also required to comply with extensive governance and disclosure regulations.

Key Characteristics of a Public Limited Company

  1. Limited Liability: Shareholders’ liability is limited to the amount unpaid on their shares. This means personal assets of shareholders are protected.
  2. Public Shareholding: Shares can be traded publicly and listed on the stock exchanges, making it easier for the company to raise capital.
  3. Minimum Members: A public limited company must have at least seven members, with no upper limit on the number of members.
  4. Minimum Directors: A public limited company must have at least three directors, and at least one director must be an Indian resident.
  5. Transferability of Shares: The shares of a public limited company are freely transferable, which enhances liquidity and marketability.
  6. Regulated by SEBI and MCA: Public limited companies are regulated by the Securities and Exchange Board of India (SEBI) and the Ministry of Corporate Affairs (MCA), which ensures transparency, accountability, and investor protection.

Types of Public Limited Companies

  1. Listed Public Company: A public company whose shares are listed on a stock exchange and are available for public trading.
  2. Unlisted Public Company: A public company that is not listed on the stock exchange and whose shares are not freely traded.
  3. Section 8 Public Company: A public company with charitable, religious, or other public utility purposes, which can also be registered under Section 8 of the Companies Act, 2013.

Requirements for Registration of a Public Limited Company

  1. Minimum 3 Directors: A public limited company must have a minimum of three directors, with at least one director being a resident of India.
  2. Minimum 7 Shareholders: A public limited company requires at least seven shareholders. There is no maximum limit on the number of shareholders.
  3. Unique Company Name: A unique name must be chosen and approved by the Ministry of Corporate Affairs (MCA).
  4. Registered Office: The company must have a physical registered office in India.
  5. Capital Requirements: There is no specific minimum capital requirement for a public limited company in India, but the company must have sufficient capital to meet the operating requirements.
  6. Digital Signature Certificate (DSC): All proposed directors must obtain a DSC for signing the incorporation documents.
  7. Director Identification Number (DIN): All proposed directors must have a DIN, which is a unique identification number issued by the MCA.

Advantages of Public Limited Company Registration

  1. Access to Capital: A public limited company can raise capital by issuing shares to the public, either through an initial public offering (IPO) or by listing on a stock exchange.
  2. Limited Liability: Shareholders’ liability is limited to the amount they have invested in the company, protecting their personal assets.
  3. Improved Credibility: Being a public entity, a public limited company enjoys greater credibility and trust among customers, investors, and partners.
  4. Easy Transferability of Shares: Shares of a public limited company are freely transferable, making it easier for shareholders to sell or transfer their shares.
  5. Diversification of Ownership: Public limited companies can have a large number of shareholders, which helps in spreading risks and diversifying ownership.
  6. Better Visibility and Marketability: Public limited companies benefit from high visibility and market recognition due to their status and the ability to advertise their shares to the public.
  7. Perpetual Succession: The company continues to exist even if shareholders or directors change, providing stability to the business.
  8. Attracts Professional Talent: Public limited companies can attract skilled professionals by offering stock options and other benefits.

Documents Required for Public Limited Company Registration

  1. Identity Proof of Directors: PAN card, Aadhar card, passport, voter ID, or any other government-issued photo identity of all the directors.
  2. Address Proof of Directors: Utility bills (electricity, water, etc.) or bank statements (not older than 2 months) showing the address of the directors.
  3. Photographs of Directors: Passport-sized photographs of all the proposed directors.
  4. Proof of Registered Office:
    • Ownership documents or rent agreement for the registered office.
    • Utility bill (electricity, water) of the registered office.
    • No Objection Certificate (NOC) from the owner if the office is rented.
  5. Memorandum of Association (MOA): The document outlining the company’s objectives, scope of business, and operations.
  6. Articles of Association (AOA): The document detailing the internal rules and regulations governing the company’s operations.
  7. Director Identification Number (DIN): DIN for all proposed directors.
  8. Digital Signature Certificate (DSC): DSC for all proposed directors for signing electronic forms.
  9. Company Name Reservation: Proposed company name along with the application for reservation of name with the Ministry of Corporate Affairs (MCA).
  10. Capital Details: Details of the company’s authorized capital and shareholding structure.

Start Your Public Limited Company

  1. Choose a Company Name: Select a unique name that complies with the naming rules under the Companies Act, 2013, and check its availability on the MCA portal.
  2. Obtain Digital Signature Certificate (DSC): The directors of the company need to get a valid DSC for filing the incorporation documents electronically.
  3. Obtain Director Identification Number (DIN): Directors must apply for and obtain a DIN from the Ministry of Corporate Affairs (MCA).
  4. Prepare the Memorandum and Articles of Association: Draft the MOA and AOA, which define the company’s objectives and internal rules.
  5. File Incorporation Documents: File the required incorporation documents with the Ministry of Corporate Affairs (MCA), including the application for name reservation, MOA, AOA, and proof of address for the registered office.
  6. Obtain Certificate of Incorporation: Once the application is approved, the Registrar of Companies (RoC) will issue a Certificate of Incorporation, confirming the establishment of the public limited company.
  7. Apply for PAN and TAN: After incorporation, apply for the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
  8. Open a Bank Account: Open a company bank account in the name of the public limited company.
  9. Comply with Post-Incorporation Requirements: Ensure compliance with annual filing requirements, including filing annual returns, financial statements, and other mandatory disclosures.
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