Registering a Public Limited Company in India

Registering a public limited company in India follows a series of steps and requirements as outlined by the Ministry of Corporate Affairs (MCA). Here are the essential steps to follow

1. Acquire Digital Signature Certificates (DSC):
All directors and shareholders of the public Limited Company need to acquire a DSC. A DSC is a digital key used to sign electronic documents securely.
2. Apply for Director Identification Number (DIN):
Each proposed director of the Public Limited Company must have a Director Identification Number (DIN). The DIN can be obtained by applying through the MCA portal.
3. Check Name Availability:
Choose an appropriate name for the company and check its availability on the MCA portal. The name should be unique and conform to the naming guidelines.
4. Reserve the Company Name:
After selecting an available name for your company, reserve it through the MCA portal by filing Form SPICe+ Part A (Simplified Proforma for Incorporating Company Electronically Plus).
5. Prepare Incorporation Documents:
In the next step, you need to prepare the necessary documents for company incorporation. The documents required for that purpose are as follows:
a. Memorandum of Association (MOA)
b. Articles of Association (AOA)
c. Declaration of compliance
d. Consent of proposed directors
e. Identity and address proof of directors and subscribers
6. File Incorporation Forms:
File Form SPICe+ Part B along with the necessary documents on the MCA portal. This form includes:
a. Information about the company
b. Directors' and subscribers' details
c. Capital and share structure
d. Registered office address
7. Obtain Incorporation Certificate:
Upon successful filing and verification of the application, the Registrar of Companies (RoC) will issue a Certificate of Incorporation, which includes your Corporate Identification Number (CIN).
8. Apply for PAN and TAN:
You will receive your company's Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) along with the Certificate of Incorporation.
9. Open a Bank Account:
Open a bank account in the name of the company using the Certificate of Incorporation, PAN, and other necessary documents.
10. Comply with Additional Requirements:
You need to obtain other necessary business licenses and registrations as per your business operations.
You need to hold the first board meeting within 30 days of incorporation and the first general meeting within 6 months. It is mandatory for you to maintain proper books of accounts and statutory records.
11. File Other Forms:
Depending on your business and industry, you may need to file other forms with the RoC such as Form INC-20A (Declaration for commencement of business) and others.
Benefits of Public Limited Company Incorporation:
Incorporating a public limited company (PLC) in India can offer you with several benefits. Here is the list of advantages that you can enjoy with a Public Limited Company Incorporation.
1. Limited Liability:
In a Public Limited Company, the liability of the shareholders is limited to the amount they have invested in the company. Their personal assets are not at risk in case of business debts or losses.
2. Ability to Raise Capital:
Public limited companies can raise capital by issuing shares to the public through an initial public offering (IPO) and subsequent stock offerings. This provides significant funding for business expansion and growth.
3. Increased Credibility and Transparency:
Public limited companies are required to comply with strict regulatory and reporting requirements. This increases credibility and transparency with customers, suppliers, and investors.
4. Perpetual Existence:
A public limited company has a perpetual existence, which is not affected by changes in ownership or management. The company continues to exist even if its founders or major shareholders change.
5. Transferability of Shares:
Shares in a public limited company can be freely bought and sold on the stock market. This allows the shareholders to easily transfer ownership.
6. Greater Visibility and Marketability:
A public limited company has greater visibility of the business and can improve its marketability. It has the potential to attract more customers, investors, and talented employees.
7. Access to Debt Financing:
Public limited companies have better access to debt financing options such as issuing debentures, commercial paper, or obtaining loans from banks and financial institutions.
8. Stock Option Plans:
Public limited companies can offer stock options to employees, providing a way to attract and retain top talent while aligning their interests with the company's success.
9. Growth Opportunities:
Public limited companies have access to larger pools of capital and the ability to expand operations, make acquisitions, and enter new markets.
10. Tax Benefits:
Public limited companies can benefit from various tax advantages and deductions available to businesses in India.
11. Corporate Governance:
Strong corporate governance practices are required for public limited companies. Thus, it can lead to better management and decision-making.

Regulatory Requirements for Public Limited Company:
Public limited companies in India are required to follow strict regulatory requirements as outlined by the Ministry of Corporate Affairs (MCA), the Securities and Exchange Board of India (SEBI), and other relevant regulatory bodies. Here are the key regulatory requirements for public limited companies:

1. Company Formation and Registration:
Public limited companies must be incorporated with the Registrar of Companies (RoC) by filing the appropriate forms and documents (e.g., SPICe+ forms) and obtaining a Certificate of Incorporation.
2. Corporate Governance:
Public companies must comply with the corporate governance guidelines, including the appointment of independent directors and the formation of committees such as the audit committee, nomination and remuneration committee, and stakeholders' relationship committee.
3. Board of Directors:
A public limited company must have a minimum of three directors. The board must hold regular meetings and maintain proper records of resolutions and decisions.
4. Disclosure and Reporting:
Public limited companies must provide regular disclosures and reports to regulatory bodies, shareholders, and the public. This includes annual reports, quarterly and annual financial statements, and corporate governance reports.
5. Prospectus and Public Offering:
When issuing shares to the public, companies must prepare and file a prospectus with SEBI and the RoC, outlining details such as the company's financials, business plan, and risks.
6. Statutory Meetings:
Public limited companies must hold an annual general meeting (AGM) each year and file the annual return with the RoC. They must also hold the first board meeting within 30 days of incorporation.
7. Share Capital and Dividends:
Public Limited Companies are required to stick to the rules regarding the issuance, transfer, and redemption of shares, as well as dividend distribution and shareholder rights.
8. Audits and Financial Statements:
Public limited companies must undergo annual audits by a qualified auditor and file audited financial statements with the RoC.
9. SEBI Regulations:
Public limited companies listed on a stock exchange must comply with SEBI regulations related to securities offerings, market disclosures, and trading.
10. Other Statutory Compliances:
Companies must comply with applicable laws and regulations such as the Companies Act, 2013, labour laws, tax laws, environmental regulations, and industry-specific regulations.
11. Maintaining Records:
Proper records must be maintained, including the minutes of board and general meetings, share registers, and statutory books.
12. Changes in Company Structure:
Any changes in the company's structure, such as changes to the Memorandum and Articles of Association, directors, or share capital, must be filed with the RoC.
In case, a Public Limited Company fails to comply with these regulations, it might face penalties, fines and legal actions.

Published on: January 10, 7019, 5:14 pm