Explore all the details you need about Public Limited Company Registration, tailored for your needs.
A Public Limited Company (PLC) is a business structure in India designed for large-scale operations. PLCs can raise capital by offering shares to the general public through stock exchanges, making them an ideal choice for entrepreneurs aiming for significant growth. This structure combines the benefits of corporate privileges with the feature of limited liability.
PLCs can access a wider pool of capital by allowing public investment, which facilitates expansion and operational scalability.
Solocorp Verifocus Legal LLP offers end-to-end services to assist in the smooth and efficient registration of Public Limited Companies in India. These services include registration, compliance management, and operational setup, ensuring a hassle-free experience for businesses.
A Public Limited Company is a corporate entity that allows the general public to hold ownership through publicly traded shares. These shares can be bought and sold on established stock markets, enabling a wide range of investors, brokers, and traders to participate in the company's equity ownership.
Public Limited Companies are governed by stricter regulatory and reporting standards compared to private companies. In India, the Companies Act of 2013 outlines the rules governing these entities. A minimum of 7 members is required to start a Public Limited Company, and there is no upper limit on the number of shareholders.
The daily operations of a Public Limited Company are managed by an executive team, while ownership lies with shareholders who invest in the company's stock. These shareholders typically have voting rights, including the ability to elect the board of directors, which is responsible for appointing the executive team to oversee business operations.
A public limited company must appoint at least three directors as per the Companies Act, with no upper limit on the number. The board of directors governs the company's management and strategic decision-making.
It is legally required for public limited companies to include the word 'Limited' in their name. This indicates the company's status as a public entity, open to public investment and capable of trading shares on the stock market.
Public limited companies must prepare and issue a prospectus, providing detailed information about their operations and financial health. This document helps potential investors make informed decisions.
The Companies Act does not mandate a minimum initial share capital for public limited company registration. This offers flexibility for companies to structure their capital as per their needs and strategic goals.
Public limited companies can be categorized into two distinct types based on their stock trading and regulatory requirements. Here are the types:
This type of public limited company has its shares actively listed and available for trading on one or more stock exchanges. This allows for greater liquidity and exposure to a diverse pool of investors.
Unlike listed companies, unlisted public limited companies do not have their shares traded on any stock exchange. This results in less liquidity, lower public scrutiny, and fewer regulatory requirements, appealing to businesses seeking a broader shareholder base without full public trading complexities.
When registering a public limited company in India, it is essential to meet specific legal and financial requirements outlined under the Companies Act. Below are the key requirements for registration:
A minimum of seven shareholders is required to form a public limited company, with no upper limit on the number of shareholders.
A minimum of three directors is needed to establish a public limited company. Each director must have a valid Director Identification Number (DIN).
The company must have a minimum authorised share capital of Rs. 1 lakh to meet the financial requirements for registration.
At least one director must possess a Digital Signature Certificate (DSC) for authenticating the electronic submission of documents.
The proposed company name must comply with the provisions of the Companies Act, ensuring it is unique and not already in use.
Key documents include the Memorandum of Association (MOA), Articles of Association (AOA), and Form DIR-12, which registers the directors' details.
Public limited companies can raise funds by selling shares to the public, which provides a major boost in capital and facilitates funding for expansion projects.
With strict regulations that give investors confidence, public limited companies have a variety of financial options to raise funds, offering more flexibility.
Shareholders of a public limited company enjoy limited liability protection. In case of unexpected liabilities, the responsibility is limited to the company, and shareholders are not personally affected.
Going public allows smaller companies to expand by raising funds for growth and improving operational efficiency due to increased accountability.
While a public limited company requires a minimum of seven shareholders, there is no upper limit to the number of shareholders, allowing for greater flexibility in its ownership structure.
Shares of public limited companies can be easily traded on the stock market, attracting more investors and allowing existing shareholders to sell their shares with ease.
To successfully register a Public Limited Company in India, you will need to provide the following documents. These documents ensure compliance with the Companies Act and facilitate the registration process:
Public limited company registration involves several structured steps that adhere to regulatory requirements. Here is a detailed guide to the procedure:
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.
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.
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.
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.
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.
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.
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.
Depending on the nature of the business and the specific sector it operates in, you may need additional approvals or registrations, such as GST registration, import/export code, or industry-specific licenses.