Public Limited Company Registration

Public Limited Company Registration enables businesses to enjoy the benefits of limited liability while offering shares to the public for raising capital. A public limited company in India provides opportunities for investors to buy and sell shares, promoting transparency and wider ownership. This structure is ideal for large-scale enterprises aiming for growth and access to funding through public investment.

A public limited company in India is a type of business structure that allows shares to be offered to the general public, promoting broader ownership and raising significant capital. Governed by the Companies Act, 2013, it must have a minimum of seven members and three directors. Unlike private limited companies, public companies can list their shares on stock exchanges, enhancing transparency and accessibility for investors.

This structure is ideal for businesses aiming for large-scale operations, as it facilitates raising funds through public offerings. Key features include limited liability for shareholders, perpetual succession, and mandatory compliance with regulatory requirements.

Public limited companies also offer advantages like credibility, access to funding, and the ability to scale operations. However, they come with higher compliance obligations and restrictions compared to private companies.

A public limited company in India is a preferred business structure for organizations seeking to operate on a large scale and raise substantial capital. Below are the key features of a public limited company:

1. Separate Legal Entity: A public limited company is distinct from its shareholders and directors, allowing it to own assets, incur liabilities, and enter into contracts independently.
2. Limited Liability: The liability of shareholders is limited to the extent of their shareholding, protecting personal assets from business debts.
3. Minimum Members and Directors: A public company must have at least seven members and a minimum of three directors to comply with the Companies Act, 2013.
4. Perpetual Succession: The company continues to exist regardless of changes in ownership or the demise of shareholders.
5. Shares and Fundraising: Shares of a public limited company can be freely traded on stock exchanges, enabling the company to raise funds from the public.
6. Regulatory Compliance: Public limited companies must adhere to stringent regulations, including annual disclosures, financial audits, and board meetings.

This structure promotes transparency and trust, making it ideal for large-scale businesses.

The registration of a public limited company in India is governed by the Companies Act, 2013, and involves a structured procedure. Below is a step-by-step guide to help you navigate the public limited company registration process:

Step 1: Obtain Digital Signature Certificates (DSC)

Every director and shareholder must obtain a DSC for e-filing documents during the registration process.

Step 2: Apply for Director Identification Number (DIN)

Each director must have a unique DIN, which can be applied for through the MCA portal.

Step 3: Name Approval

Submit at least two proposed names for the company via the RUN (Reserve Unique Name) service on the MCA portal. Ensure the name aligns with the Companies Act, 2013, guidelines.

Step 4: File Incorporation Documents

Prepare and file the following essential documents with the Registrar of Companies (RoC):

• Memorandum of Association (MoA)
• Articles of Association (AoA)
• Declaration by directors and promoters
• Address proof of the registered office

Step 5: Issue Certificate of Incorporation (COI)

Once the RoC verifies the submitted documents, a Certificate of Incorporation is issued. This confirms the legal existence of the public limited company.

Step 6: Obtain PAN and TAN

Apply for the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).

By completing this process, the company can start its operations legally and raise funds publicly.

To register a Public Limited Company in India, several key documents are required to ensure compliance with the regulatory framework set by the Ministry of Corporate Affairs (MCA). The following is a list of documents needed for public limited company registration:
 

1. Proof of Identity of Directors: A government-issued ID, such as a Passport, Voter ID, Aadhar Card, or Driver's License, is required for each director. This is necessary to verify their identity for the registration process.
    
2. Proof of Address of Directors: A utility bill, bank statement, or rental agreement not older than 2 months is required to confirm the residential address of each director.
    
3. Proof of Registered Office Address: A recent utility bill (electricity or water) and the No Objection Certificate (NOC) from the property owner or landlord are necessary to prove the company’s registered office.
    
4. PAN Card: The Permanent Account Number (PAN) card is essential for every director and shareholder, as it is used for tax identification.
    
5. Memorandum and Articles of Association (MOA & AOA): These documents define the objectives and operating rules of the company and are required for public limited company registration.
    
6. Director Identification Number (DIN): This is a unique identification number assigned to each director of the company.
    
7. Certificate of Incorporation: This is provided after the public limited company is successfully registered and includes the company’s name, registration number, and other details.

By providing these documents, the process of public ltd company registration can proceed smoothly.

A public limited company (PLC) is a popular choice for businesses aiming to scale and access public funding. However, it comes with its own set of advantages and disadvantages.
 

Advantages of Public Limited Company
 

1. Access to Capital: A public limited company can raise substantial funds by offering shares to the public through stock exchanges. This is particularly beneficial for growth and expansion.
2. Limited Liability: Shareholders' liability is restricted to the amount they have invested in shares, safeguarding personal assets.
3. Credibility and Transparency: A public company must comply with strict regulations, enhancing its credibility and trustworthiness among investors and stakeholders.
4. Perpetual Succession: The company’s existence is not affected by changes in ownership or the death of shareholders.
    

Disadvantages of a Public Limited Company
 

1. Strict Regulations: Compliance with the Companies Act, SEBI regulations, and periodic disclosures requires significant time and resources.
2. Loss of Control: Public ownership dilutes control, as decision-making is influenced by a large number of shareholders.
3. High Costs: Public limited company registration, listing, and ongoing compliance incur substantial costs.
4. Risk of Hostile Takeovers: Shares being freely transferable increases the likelihood of hostile takeovers.

Despite these challenges, the structure of a public limited company is ideal for businesses looking to scale and operate on a larger platform.

The table below highlights the key difference between private limited company and public limited company in India:

1. What is a Public Limited Company in India?

• A public limited company in India offers shares to the public and follows Companies Act, 2013 for governance, enabling growth and capital raising.
   

2. What is the difference between private limited company and public limited company?

• Private limited companies limit share transfers, while public limited companies can freely trade shares on stock exchanges, offering greater access to capital.
   

3. What is the minimum number of members for a public company?

• The minimum number of members required for a public company in India is seven. According to the Companies Act, 2013, a public company minimum members requirement ensures that the company has enough shareholders to promote transparency and governance.
   

4. What is the minimum no of directors in public company?

• The minimum no of directors in public company is three, as per the Companies Act, 2013. This ensures proper governance and decision-making within the company.
   

5. What are the types of public companies?

• Listed Public Companies: Listed on stock exchanges.
• Unlisted Public Companies: Not listed, but subject to public company regulations.
   

6. What are the advantages of a public limited company?

• Advantages include capital raising, credibility, and growth through share trading, making it ideal for large-scale enterprises.
   

7. What are the disadvantages of a public limited company?

• Disadvantages include high compliance costs, loss of control, and the risk of hostile takeovers due to share transferability.
   

8. How does public limited company registration differ from private company registration?

• Public limited company registration involves stricter compliance, listing procedures, and higher capital requirements compared to a private limited company.
   

9. What are the features of a public limited company?

• Key features include limited liability, perpetual succession, and the ability to raise funds via public offerings, ensuring transparency and credibility.
   

10. What is the difference between private and public limited company characteristics?

• Public Ltd: Shares traded publicly, higher transparency, stricter regulations.
• Private Ltd: Shares restricted, fewer regulatory obligations.

Choosing a public limited company structure in India allows businesses to enjoy limited liability and gain access to the capital markets for expansion. While the public limited company registration process involves stricter compliance and higher costs compared to private companies, it offers the advantage of raising substantial funds through public offerings. Understanding the features, benefits, and regulatory requirements is essential for successful incorporation.

For a hassle-free experience and seamless public ltd company registration, let Filing Buddy guide you through the process, ensuring compliance with all legal standards and smooth operations.