Public Limited Company Registration

In India, a Public Limited Company (PLC) is a business structure suited for large-scale operations. Entrepreneurs who are planning for large-scale business operations can start a Public Limited Company registration in India. Unlike private companies, PLCs can raise funds from the general public by offering shares on stock exchanges. This allows them to access a wider pool of capital for growth. A Public Limited Company in India enjoys all the privileges of a corporate entity together with the features of Limited Liability. Entrepreneurs and aspiring business owners must understand what is public limited company and the registration process to obtain all the benefits.

IndiaFilings can help you start your public limited company in India with ease and efficiency. Our comprehensive services cover everything from company registration to compliance management, ensuring a smooth and hassle-free setup process for your business.

What is Public Limited Company in India?

A public limited company meaning defined by its unique function, which is a form of corporate entity that permits the general public to hold ownership stakes through publicly traded shares. These shares are commonly exchanged on established stock markets, enabling a diverse group of brokers, investors, and traders to buy and sell equity. This structure allows individuals from various backgrounds to invest and hold shares in the company.

Unlike private companies, public limited companies are governed by stricter regulatory and reporting standards. In India, the law governing public limited companies is primarily outlined in the Companies Act of 2013. The public company minimum members is 7, and there is no limit on the maximum number of members /shareholders for starting a Public Limited Company.

The day-to-day operations are managed by an executive team, but the broader ownership lies with the many shareholders who invest in the companys stock. These shareholders typically have voting rights that include the ability to vote on the election of the board of directors. The board then selects the executive team tasked with managing the company's ongoing business affairs. It is important to remember to meet the minimum shareholders in public company to proceed in the functions.

Types of Private Limited Companies:

Entrepreneurs or prospective businessmen must consider the following types of private limited companies, if they intend to start company or undertaking the business registration in India,

• Company Limited by Shares: Shareholders' liability is limited to the nominal share amount mentioned in the Memorandum of Association.

• Company Limited by Guarantee: Member liability is limited to the amount of guarantee specified in the Memorandum of Association. This guarantee is invoked only during winding up.

• Unlimited Companies: Members of unlimited companies have unlimited personal liability for the company's debts and liabilities. However, they are still considered a separate legal entity, and individual members cannot be sued.

Ensure you deeply understood these types before proceeding to the business registration in India.

Key Characteristics of a Public Limited Company

Below are the fundamental characteristics of a public limited company:

• Board of Directors: According to the Companies Act, a public limited company must appoint at least three directors, with no upper limit on the number. The board of directors plays a crucial role in governing the company's management and strategic decision-making.

• Company Name: It is a legal requirement for all public limited companies to include the word "Limited" in their company name. This designation indicates that the company is legally a public entity, capable of trading shares on the stock market and open to investment by the public.

• The Company's Prospectus: Public limited companies are required to prepare and issue a prospectus. This document offers a detailed look at the company's operational activities and financial health, providing essential information to potential investors and aiding their decision-making process.

• Paid-Up Capital: While the Companies Act stipulates various regulations for public limited companies, it does not impose a minimum initial share capital requirement for registration. This absence of a specified minimum allows companies the flexibility to set their capital structure according to their specific needs and strategic objectives.

Types of Public Limited Company

Public limited companies are broadly categorised into two distinct types:

Listed Company

This type of public limited company has its shares actively listed and available for trading on one or more stock exchanges. This accessibility allows the public and various financial entities to buy and sell the company's shares, providing greater liquidity and exposure to a diverse pool of investors.

Unlisted Company

Unlike its listed counterparts, an unlisted public limited company does not have its shares traded on any stock exchange. As a result, its shares are not as easily transferable, and the company does not experience the same level of public scrutiny or regulatory requirements as a listed company. This category of public limited company may appeal to businesses seeking to benefit from a broader base of shareholders while avoiding the complexities of full public trading.

Advantages of Public Limited Company Registration

Registering as a public limited company brings several key benefits:

• Easier Access to Capital: These companies can raise funds by selling shares to the public, which provides a major boost in capital and makes it easier to fund expansion projects.

• Financial Flexibility: Public limited companies can raise money using a variety of financial options, thanks to strict regulations that give investors confidence in their investments.

• 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 would not affect the shareholders in any way.

• Growth Opportunities: Going public can help smaller companies grow by providing the funds needed for expansion and improving operational efficiency due to increased accountability.

• Flexibility in Shareholder Structure: While the Public company minimum members are 7 shareholders, there is not upper limit for maximum members.

• Easy Share Trading: Shares of public limited companies can be bought and sold easily on the stock market, which attracts more investors and makes it simpler for existing shareholders to sell their shares if they choose.

These benefits make public limited companies attractive for businesses looking to expand and attract investment.

Public Limited Company Registration Procedure

Public limited company registration involves several structured steps that adhere to regulatory requirements. Here is a detailed guide to the procedure:

Step 1: Obtain Digital Signature Certificates (DSC)

Before starting the registration process, obtain Digital Signature Certificates (DSC) for all proposed directors and subscribers to the memorandum and articles of association. DSC is essential for filing the forms online on the Ministry of Corporate Affairs (MCA) portal.

Step 2: Apply for Director Identification Number (DIN)

Each proposed director must have a Director Identification Number (DIN). This can be applied for using the SPICe form, which also simplifies the application process. You need to provide proof of identity and address as part of the DIN application.

Step 3: Check Company Name Availability

Use the MCA online portal to check if your desired company name is available. It is important to ensure that the name does not infringe upon any existing trademarks or is not already in use. This step is crucial as it establishes the unique identity of your company.

Step 4: File SPICe+ Form

Once the name is approved, proceed to file the SPICe+ form. This comprehensive form is designed to cover all legalities for the incorporation of a company. Along with this form, you will need to submit the Memorandum of Association (MOA) and Articles of Association (AOA), which detail the constitution and rules governing the management of the company.

Step 5: Certificate of Incorporation

After the submission of the SPICe+ form and necessary documents, the Registrar of Companies (ROC) will review the application. Upon successful verification, the ROC issues a Certificate of Incorporation. This certificate is a legal document that marks the birth of the company and includes the company's Corporate Identification Number (CIN) and the date of incorporation.

Step 6: Apply for PAN and TAN

With the incorporation certificate in hand, the next step is to apply for the company's Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). These are essential for all tax-related transactions and compliances.

Step 7: Open a Company Bank Account

Finally, open a bank account in the name of the company. You will need the Certificate of Incorporation, MOA, AOA, PAN, and other relevant documents to set up the bank account. This account will handle all monetary transactions of the company.

Basic

Standard

Rs.20,499
Plus taxes

• Company name precheck

• Certificate of Incorporation

• PAN & TAN

• 3 DIN

• MOA & AOA

• Current Bank Account

(3 Indian Directors, 7 Shareholders and Authorised Capital of Rs. 5,00,000)

Let's Start

Rs.25,499
Plus taxes

• Company name precheck

• Certificate of Incorporation

• PAN & TAN

• 3 DIN

• MOA & AOA

• Current Bank Account

• PF & ESIC Registration

• GST registration

• Commencement of Business

• Auditor Appointment (ADT-1)

(3 Indian Directors, 7 Shareholders and Authorised Capital of Rs. 5,00,000)

Let's Start