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Overview
A Public Limited Company registration is the most viable business structure for entrepreneurs who are aiming for large-scale business operations. To register a Public Ltd. Company there must be a minimum of 7 members and there is no maximum limit to the number of members/shareholders for starting a Public Ltd. Company.A Public Limited Company under the Company Act, 2013 is a company that offers shares to the public at large and has limited liability. The stock of the company can be acquired by anyone, privately through an IPO (Initial Public Offering) or through trades on the stock market. A Public Limited Company is regulated very strictly and is required to publish its true financial health to its shareholders at all times.
The rules and regulations governing a Public Limited Company are stricter in comparison to that of a Private Limited Company. It is a better option to incorporate a Public Ltd. Company as it has the benefits of a Private Ltd. Company, with features such as easy transferability and ownership of shares.
Registration Requirements
The Rules Regulation under the Companies Act, 2013 have to adhered to in order to form a public limited company. The key requirements are enlisted below:
- Minimum 7 shareholders are required to form a public limited company.
- A minimum of 3 directors are required to form a public limited company, and a minimum share capital of Rs. 5 Lakhs is required.
- A digital signature certificate (DSC) of one of the directors is needed while submitting self-attested copies of identity and address proof.
- Directors of the proposed company will need a
- An application comprising the main object clause of the company is to be made. This object clause will define what a company will pursue after its incorporation.
- Submission of the application to ROC (Registrar of Companies) along with the required documents like MOA, AOA, duly signed Form DIR-12, Form INC-7, and Form INC-22 are needed.
- After obtaining approval from ROC, the company should apply for the “certificate of business commencement”.
Documents Required
- Passport-sized photographs of all the Directors.
- Copies of the Identity Documents of all the Directors of all the Directors (Aadhar Card, Voter Card, PAN Card)
- DSC (Digital Signature Certificate) of all the Directors
- DIN (Digital Identification Number) of all the Directors
- If the office is rented property- The rent agreement
- If the office is an owned place- the property ownership documents
- Water bill and electricity bill of the business place
- NOC by Landlord (No objection Certificate) – In case of rented office
- Memorandum of Association (MOA)
- Articles of Association (AOA)
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Frequently Asked Questions
What are the main advantages of a Public Limited Company?
A Public Limited Company can raise capital from the public by issuing shares. It also provides limited liability to shareholders, easy transferability of shares, better credibility, and the opportunity to be listed on the stock exchange.
Can a Public Limited Company raise funds from the public?
Yes, a Public Limited Company can raise funds from the general public by issuing shares through an Initial Public Offering (IPO) and through other capital market instruments.
Is it mandatory for a Public Limited Company to be listed on a stock exchange?
No, it is not mandatory for every Public Limited Company to be listed on a stock exchange. A company may remain unlisted but still operate as a Public Limited Company.
What is the liability of shareholders in a Public Limited Company?
The liability of shareholders in a Public Limited Company is limited to the amount of share capital invested by them. Their personal assets are not at risk for the company’s debts.
How long does it take to register a Public Limited Company in India?
The registration process for a Public Limited Company generally takes 15 to 25 working days, depending on the approval from the Registrar of Companies and submission of the required documents.
Can shares of a Public Limited Company be transferred easily?
Yes, shares of a Public Limited Company are freely transferable, which means shareholders can transfer their shares to other individuals without major restriction