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A public limited company (PLC) is a company whose ownership is divided into shares that can be sold in the public market. It must register under Section 2(71) of the Companies Act 2013. Such companies have limited liability. This implies that in case the company is facing a loss or debt, the liability does not go beyond the unpaid value on the shares held by the shareholders. Such companies should have a minimum of seven members and three directors. The shares of a public company can be quoted on a recognised stock exchange, and anyone can purchase and/or sell them as per rules and regulations.They should have its name ending with the word “Limited.” There is no minimum capital requirement, whereas previously it was a requirement.
Some of the key characteristics of public companies are given below:
Public limited company registration requires that you have a minimum of seven shareholders. The shareholders could also be companies and/or individuals. You will also require a minimum of three directors to run the affairs of the company.
The major consolation offered by investors to corporations or companies is limited liability. Shareholders of this type of corporation or company are not obligated to contribute from their own personal property for repaying debts. Their liability is limited to the amount they agreed to pay for shares.
The publicly limited company is created in accordance with its authorised share capital. This is the maximum capital that the company can issue. The paid-up capital is the share capital that has been issued and paid in cash.
The company's name has to be made unique, not similar to a registered company or any trademark, and has to end with the word “Limited". This will make a world declaration that the company is a public company with limited liability that is limited.
In order to register a Public company in India one needs to fulfill the criteria given below:
To form a public limited company in India, you are required to prepare a proper set of documents for the promoters, the directors, and the company.
Every director and shareholder will have to give valid identity and address proofs, like PAN card number in case of foreign nationals residing in India, and Aadhar number/card, passport, voter ID card, and driving license within India.
Every proposed director needs to have a DSC. This is a digital signature which is applicable for signing incorporation documents and other documents which are submitted via the MCA website. A proposed director needs to have a DSC, as no document can be submitted on the electronic filing system without a digital signature.
The MoA is the constitution of a company. It maintains the name of the company, the name of the State in which its registered office is situated, its objects or description of what the company will do, its members’ liability, as well as its capital.
The AoA defines the internal management laws. The AoA deals with the appointment and powers of directors, conduct of the board and general meeting, issuing and transferring shares, voting rights, dividends, and other internal affairs of management.
It is necessary to submit proof of a registered office of the company. This will include a recent utility bill, a lease/rent agreement in case of a rented office, and a No Objection Certificate, which is obtained in case of an office being provided by the owner.
The company must apply for its own PAN and TAN after or during the incorporation. The PAN is required for all income Tax transactions and banking operations. The TAN is required for deducting and depositing taxes due (TDS).
In earlier times, there were different filing options like DIR-12 for director particulars, INC-7 for incorporation application, and INC-22 for the registered office address. However, currently, most information is sought via integrated forms like SPICe+ (INC-32), along with various other interconnected forms for MoA and AoA.
The system is currently utilising the form SPICe+ (INC-32) and others, while the rational process flow is as follows:
The initial step would be to obtain the DSC for the proposed directors. You would approach a licensed certifying authority and undergo the verification process for identity and address proof. The DSC would then be required to sign all registration documents and subsequent MCA filings.
Every director requires a unique Director Identification Number. DIN may be obtained through the SPICe+ form for new directors, or it could already have been allotted to those who are already directors of existing companies.
You have to propose one or more suggested names for the company and seek approval from the MCA portal. The company names have to comply with naming regulations and cannot violate any existing names of companies or any registered trademarks.
After the name is approved and the structure is finalized, you prepare the "Memorandum of Association and Articles of Association." These are designed according to your proposed business model, shareholding structure, and governance structure by your promoters.
At this point, you will submit the principal incorporation form to the MCA. This form provides specifics regarding the name of the business, the capital of the business, the registered office address of the business, the objects that the business aims for, the list of directors of the business, and the list of subscribers of the business.
The Registrar of Companies reviews the application, documentation, and legality. If all documents and legality are in order, the Registrar issues a Certificate of Incorporation (COI) and Corporate Identity Number (CIN) to the company.
Registration of public companies in India takes such time as it is taken by other corporate entities as it is also registered through the same procedure with the same platform that is MCA. It takes almost 15-30 days to register such an entity . Also sometimes it got delayed due to some issues like names found similar, documents missing, information missing in the application etc. It is difficult to give an exact number of its registration fees as it may vary depending upon various factors like number of directors and shareholders, from whom you are registering, how many times name got rejected etc.
Some of the key benefits of registering a public company under the Companies Act of 2013 are:
A Public Limited Company registration is the best choice for those who want to expand, raise money from the public, and establish a broad shareholders' base. It provides the benefits of limited liability and the possibility of generating a large amount of money. However, it requires more administrative tasks. To incorporate a such company, a minimum of seven members, three directors, a unique name ending in “Limited,” and various other formalities like DSC, DIN, name reservation, and SPICe+ with the Memorandum of Association, Articles of Association, and office proofs, etc., are needed. This is a widely used model by large and emerging brands to get ready for public listing.
