Public Limited Company Registration
Establishing a Public Limited Company in India is highly advantageous for business owners who have ambitious plans for large-scale operations. Unlike other types of companies, there is no maximum limit on the number of shareholders or members that can form a Public Limited Company in India. However, it is mandatory to have a minimum of seven members. By registering as a Public Limited Company, business owners can enjoy the privileges and protections of a corporate entity, including limited liability. Moreover, Public Limited Companies have the option to raise funds from the general public by listing their shares on the stock exchange. Nevertheless, it is crucial for Public Limited Companies to comply with various government regulations in order to operate legally and smoothly.
What documents are necessary for a Public Limited Company?
- Identification proof is required from all directors and stockholders.
- Proof of residence is needed for each shareholder and director.
- PAN numbers are required for all shareholders and directors.
- The utility bill for the proposed office will serve as the Company’s registered office.
- A NOC (No Objection Certificate) signed by the landlord of the office space is necessary.
- Each director must provide their Director Identification Number (DIN).
- Directors must possess a Digital Signature Certificate (DSC).
- Both the Association Memorandum (MOA) and Articles of Association (AOA) must be provided.
Requirements for Public limited Company
When registering a Public Limited Company in India, it is important to meet certain requirements. This checklist has been designed to provide you with guidance throughout the process:
- A minimum of 7 shareholders is necessary.
- At least 3 Directors must be appointed.
- A minimum share capital of Rs.5 lakh is required.
- One of the Directors must have a Digital Signature Certificate (DSC) for submitting self-attested identity copies and address proof.
- Directors must obtain a Director Identification Number (DIN).
- An application must be made to select the Company’s name.
- The application should include the main object clause, which outlines the Company’s objectives.
- Submit the application to the Registrar of Companies (ROC) along with necessary documents such as Memorandum of Association (MOA), Articles of Association (AOA), Form DIR-12, Form INC 7, and Form INC -22.
- Pay the registration fees as prescribed by the ROC.
- Once the ROC approves the application, the Company can proceed to apply for the business commencement certificate.
What advantages come with the registration of a Public Limited Company?
Registering as a Public Limited Company offers numerous advantages such as:
- Self-contained Legal Entity: A public limited company is acknowledged as a separate legal entity from its shareholders. It maintains perpetual existence and is authorized to have its own PAN, bank account, approvals, contracts, licenses, assets, and liabilities.
- Room for advancement: The organization’s considerable capital base translates into vast development possibilities, particularly in the context of an open limited company.
- Shares are transferable with ease: A major advantage offered by a Public Limited Company is the seamless transferability of shares from one shareholder to another, regardless of whether they are individuals or organizations, within India or overseas. Moreover, the director of the company can be altered to maintain the continuity of the business.
- Diverse funding channels: Both individuals and financial institutions provide funding to a public limited company. The company may also raise capital through equity shares, preference shares, or debentures.
- Supervision: The Board of Directors, selected by the investors, holds authority over the organization.
- Protected Liability: The shareholders of a Public Limited Company enjoy limited liability protection. Any unforeseen liability would be limited to the company alone and would not have any implications for the shareholders.
The process of acquiring registration for a Public Limited Company
- Step 1:- To proceed with the registration process, it is vital to meet all the necessary legal requirements, including the fulfillment of the required Number of Directors, Number of shareholders, and minimum paid-up share capital. Only upon completion of this step will the subsequent stages of registration be initiated.
- Step 2:- The Company’s directors need to have their DSC and DIN. Only natural persons can be directors, not entities such as LLPs or Financial institutions. Being a shareholder of the Company is not compulsory for directors.
- Step 3:- To be acknowledged as a registered office, it is necessary to have a proper Company address. The Registered office address should be registered with the Registrar of Company under whose jurisdiction the office is located. It is important to accurately enter this office address, as all business-related correspondence will be directed to the registered office address. The registration fee will vary depending on the company’s authorized capital.
- Step 4:- Prior to registration, the Company’s name must undergo approval from the ROC. In the case of a Public Limited Company, the name should have the suffix “Limited”. The application for name approval will be filed through the RUN form offered by the Ministry of Corporate Affairs. It is advisable to provide a list of preferred names in case a specific name is unavailable.
- Step 5:- After the Company’s name has received approval, it is essential to proceed with the execution of the crucial Company documents, namely the Memorandum of Association (MoA) and the Articles of Association (AoA).
- Step 6:- Submission of the prepared documents to the ROC for verification is a necessary requirement.
- Step 7:- After the authentication mechanism is decided, the ROC registers the company and concerns the incorporation license along with the Company’s CIN.
- Step 8:- The business is required to wait before starting operations upon receipt of the COI. Within 180 days of obtaining the COI, the business must seek a certificate of commencement, confirming that all subscribers have paid their subscription fees.
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FAQ’s for Public Limited Company Registration
A minimum of seven individuals are needed to form a Limited Company. The minimal number of directors and shareholders for the firm is three.
To qualify as a Director, you must be at least 18 years old and a natural person. Citizenship or residency doesn’t matter, as there are no restrictions. This means that even if you’re a foreign national, you can hold the position of Director in an Indian Private Limited Company.
Starting a Limited Company allows you to decide on the capital amount you want to begin with. Just remember, when incorporating the Company, you’ll have to pay a fee to the Government for issuing a minimum of shares worth Rs.5 lakhs [Authorized Capital Fee]. No need to worry about showing proof of the capital invested during the incorporation process.
The registration process usually takes around 15-30 days, but this can vary depending on how comprehensive your application is and how swiftly the Registrar of Companies (ROC) processes it.
Definitely! Foreign nationals and NRIs have the opportunity to be directors and shareholders of a public limited company in India, provided they meet specific conditions and comply with foreign exchange regulations.
Under the Companies Act, there is a formal process in place that allows for the conversion of a public limited company into a private limited company, or vice versa. However, it is essential to adhere to the regulatory framework and obtain the necessary approvals for this conversion to take place.
· The capability to raise capital from the public by issuing shares.
· Shareholders benefit from limited liability protection.
· Enhanced market credibility and reputation.
· Expanded access to financing and growth prospects
In India, public limited companies are obligated to pay corporate income tax at the specified rates. Moreover, they are mandated to follow Goods and Services Tax (GST) guidelines and fulfill other indirect tax duties.