A Public Limited Company is a type of company whose shares are traded publicly on a stock exchange. Unlike a private limited company, a public limited company can raise capital from the public by issuing shares and debentures.
A Public Limited Company is a type of company whose shares are traded publicly on a stock exchange. Unlike a private limited company, a public limited company can raise capital from the public by issuing shares and debentures. This structure is suitable for businesses looking to expand significantly and attract a large number of investors. Public Limited Companies are governed by stringent regulations to ensure transparency and accountability, offering a robust framework for large-scale operations and substantial capital inflow.
Requirements of Public Limited Company Registration
To incorporate a Public Limited Company, the following requirements must be met:
Minimum Shareholders: A minimum of seven shareholders is required, with no maximum limit.
Directors: A minimum of three directors is necessary, with at least one director being a resident of India.
Paid-Up Capital: There is no minimum capital requirement, but a recommended capital is INR 5 lakhs.
Registered Office: A registered office must be maintained within India.
Characteristics of Public Limited Company
Key characteristics of a Public Limited Company include:
Share Trading: Shares can be bought and sold publicly on stock exchanges, providing liquidity and the potential for significant capital inflow.
Legal Entity: The company is a separate legal entity from its shareholders, meaning it can own property, enter into contracts, and be sued in its name.
Accountability: Public Limited Companies are subject to rigorous reporting and disclosure requirements to ensure transparency and protect investors.
Limited Liability: Shareholders’ liability is limited to the amount unpaid on their shares, protecting personal assets from business liabilities.
Advantages of Public Limited Company
Access to Capital: Ability to raise substantial capital from the public through the issuance of shares.
Enhanced Profile: Being publicly listed can increase the company’s visibility and credibility.
Liquidity: Shares can be freely traded on stock exchanges, providing liquidity for shareholders.
Disadvantages of Public Limited Company
Regulatory Scrutiny: Public Limited Companies are subject to strict regulatory requirements, including regular financial disclosures and audits.
Costly Compliance: High costs related to compliance, reporting, and governance can be burdensome.
Vulnerability to Market Fluctuations: Share prices are subject to market fluctuations, which can impact the company’s valuation.
Documents Public Limited Company Registration
Registering a public limited company can be a smart move. However, one must know about the important documents required for public limited company registration. Here is a checklist of documents required to register a public limited company in India:
Identity Proof – Passports and PAN cards of international and Indian directors.
Address Proof – Utility bills or rental agreements as residential address proof.
Director Identification Number (DIN) – DIN assigned by the Ministry of Corporate Affairs.
Digital Signature Certificate (DSC) – An electronic signature that guarantees the legitimacy of papers submitted online.
Memorandum of Association (MoA) – Official document outlining the company’s goals and range of activities.
Articles of Association (AoA) – A written statement of the procedures and policies guiding the company’s internal management.
Declaration by Directors and Subscribers – A formal declaration signed by the subscribers and directors attests to the company’s adherence to incorporation regulations.
No Objection Certificate (NOC) – NOC from the landlord if the registered office is a rented property.
Shareholding Pattern of the Proposed Company – An overview of how the company’s stockholders have been allocated their shares.
Proof of Registered Office Address – Records attesting to the place where the business is registered and runs its operations.
Process of Public Limited Company Registration
The process for registering a Public Limited Company involves:
Obtaining Digital Signature Certificates (DSC): All proposed directors and shareholders must have valid DSCs.
Applying for Director Identification Number (DIN): Proposed directors must apply for DIN through Form DIR-3.
Name Approval: Apply for the availability and approval of the company name through the SPICe+ form.
Drafting MOA and AOA: Prepare and submit the Memorandum of Association and Articles of Association.
Submission of Forms: File the SPICe+ form along with necessary attachments including MOA, AOA, and proof of capital with the Registrar of Companies.
Verification and Compliance: The Registrar will review the documents and verify compliance with legal requirements.
Certificate of Incorporation: Once all requirements are met, the Registrar will issue a Certificate of Incorporation and assign a Corporate Identification Number (CIN).
Why Kickstart Business Advisors?
Kickstart Business Advisors offers comprehensive support for Public Limited Company registration, ensuring a smooth and efficient process. Our team of experienced professionals, including lawyers, CA, and CS experts, provides expert guidance on legal compliance, documentation, and regulatory requirements. With Kickstart Business Advisors, you can confidently navigate the complexities of going public and focus on growing your business.
FAQs
What are the rules for Public Limited Company registration?
Public Limited Companies must have at least seven shareholders and three directors. They are required to comply with extensive regulatory and disclosure requirements, including regular financial reporting and audits. They must also maintain a registered office in India.
Can a Public Limited Company issue shares to the public?
Yes, Public Limited Companies can issue shares to the public through stock exchanges, allowing them to raise capital from a broad investor base.
What are the advantages of being a Public Limited Company?
Advantages include access to significant capital from the public, increased company visibility and credibility, and liquidity for shareholders through the trading of shares on stock exchanges. However, it also involves higher regulatory scrutiny and costs.
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