Public limited Company Registration in India -An Overview

In accordance with the provisions of Companies Act, 2013 below are the requirements you need to fulfil for incorporation of Public Limited Company in India:

• Minimum number of shareholders is 7
• Minimum 3 Director & 4 Members Mandatory
• No minimum capital requirement
• DIN required for all directors
• Drafting of Memorandum of Association and Article of Association
• Submission of all the documents to ROC and MCA and after receiving approval from Registrar of the Companies (ROC), the proposed public company has to apply for the Certificate of Business Commencement which will complete the last step of incorporation

Companies Amendment Act 2015 have omitted the minimum paid up capital requirement and revised it that there is no minimum requirement of paid-up capital of the Company. That implies that a Public Limited Company can be formed with even Rs.1, 000 as paid-up capital.

i. Listed Companies:

As per Section 2(52) of the Companies Act, 2013 a listed company is a public company that has its securities listed on any recognised stock exchange, for e.g. BSE, NSE etc and can issue a prospectus for subscription of shares by way of an initial public offering. This ensures that there are many shareholders, securing and insuring liquidity. Examples: Wipro, Tata Consultancy Services, etc.

ii. Unlisted Companies:

Such companies are mostly owned by its promoters or private investors. They are not entitled to issue a prospectus to the public, as their securities are not listed on any recognised stock exchange. They usually finance their capital from their members, directors, their friends and relatives. An unlisted public company is different from that of a private company, as there is no limit on the number of shareholders to raise capital. They have less strict regulatory guidelines as they are not liable to comply with any regulations formulated by SEBI, it has to comply with guidelines issued by the central government or ministry of corporate affairs. Examples of such company: Bennett Coleman, Parle etc.

An applicant has to furnish all the following documents for public limited company registration-

• Identity Proof such as Aadhar card, PAN card, Driving License, Voter Id etc of all the directors and shareholders.
• Address Proof of all the directors and shareholder of the company(Last Month Bank Statement).
• Address Proof: Utility bill such as telephone, gas, water or electricity bill of the registered office. It should not be older than 1 months.
• No Objection Certificate from the owner of the business place.
• Digital Signature Certificate of the directors
• Directors Identification Number (DIN)
• Memorandum of Association (MoA) & Article of Association (AoA)

ADVANTAGES OF A PUBLIC LIMITED COMPANY

Public limited company registration is one of the popular company registrations in India due to its special advantages. Let us take a look at the advantages of Public Limited Company.

Raise Capital through Issue of Shares

Insufficiency of capital is inevitable while running a business, but a Public Limited Company has the option to raise capital by the public issue of Shares, unlike a Private Limited Company.

Funds are easily Transferable

The securities can be transferred easily. Since the stocks of a Public Limited Company are listed on stock exchange, it drives more potential shareholders.

Access to additional Funding

Banks and financial institutions generally render credit/ loans to Public Limited Companies at favourable interest rates. Public Ltd Company has the authority to negotiate the terms of conditions for loan repayment.

Limited Liability of the shareholders

The liability of the shareholders and Directors is limited to the extent of the shares they hold in the company. For example, if the company faces any financial contingencies because of primary business activity, then in such cases personal assets of shareholders and Directors will not be seized by the Banks, creditors, and government.

Maintains the Brand Protection

In Private Limited Company any foreigner or NRI can do investment without the Government approval. As a result, foreign investment inflow is creating and way of the growth of the company is making.

DISADVANTAGES OF A PUBLIC LIMITED COMPANY

A Public Limited Company may have the following disadvantages:

Higher Paid-Up Capital:

The cost of incorporating a Public Limited Company is comparatively higher

Attention to Strict Regulations:

A PLC has to comply with several statutory regulations laid by different Governmental body. Although, such legal norms are laid to safeguard the interest of the Company’s shareholders.

Requires Absolute Transparency:

Since Public Limited Companies issue prospectus to the public for share subscription, they are required to disclose all information about their growth potential and business operations. PLC has to maintain transparency in its operations, decision making, even their account details.

Mentioned below are the mandatory compliances:

• Appointment of the auditor in Form ADT-1.
• INC 20A
• Minimum 4 board meeting to be held in every financial year.
• Hold annual general meeting (AGM) every year within 6 months from the end of the financial year. And first AGM is to be held within 9 months from the end of the first financial year.
• File financial statement in Form AOC-4 within 30 days from date of Annual General Meeting.
• File annual return in Form MGT-7 within 60 days from date of Annual General Meeting.
• Statutory audit of accounts certified by Chartered Accountant at the end of the financial year.

Approximately it takes up to 20 working days to incorporate a public limited company in India. However, it may vary depending on the clearances acquired from different government authorities.

Note should as per Private limited

This article will give you a broad idea about the differences between Public Limited Company and Private Limited Company.

Public Limited Company Registration fees can range from Rs. 12500 and above depending on a number of factors. The costs may vary from state to state. It is just to give an idea about the governmental charges and levies required other than professional charges.

• We have professionals who have conducted different forms of registration activities with the priority of adding value to your business.
• We work with experienced and recognised Chartered Accountants, Company Secretaries, Lawyers, and Financial Executives.
• We have experience in registering different types of companies
• Transparent operations
• Result oriented, time-oriented approach