December 1, 2021 6:51 am
Public Limited Company
Advantages
- Limited Liability Protection
to Director’s personal assets - Better image & credibility in Market
- Easy to raise funds and loans
- Listing on Stock Exchanges
- Favourite Business structure for Investors
Minimum Requirements
- Minimum Three Directors
- Minimum Seven Members
- No Minimum Capital
- Maximum Fifteen Directors
- One Director shall be Indian resident
Meaning of Public Limited Company
According to the Company Act 2013, a Public Limited Company refers to the company which can offer shares to the public and has defined liability.
A public limited company can offer its shares to the public either via (IPO) initial public offering or trading platform like the stock market. Everyone is allowed to acquire the shares offered by PLC.
A Public Limited Company rigidly adheres to the regulations and reveals its accurate financial status to its shareholders.
Suitability & Popularity
A public company is suitable for medium and large-sized businesses that want to raise equity capital from the public. Due to its various advantages, the public limited company is one of the most popular legal entities among medium and large-size companies in India.
Characteristics of Public Limited Company
To understand the concept of PLC better, let us check its characteristics which are as follows:
Let us have a look at the benefits of establishing a public limited company.
Directors
Under Companies Act, 2013 provisions, a public limited company must have at least 3 directors.
Paid-up capital
no minimum capital is required to form a Public Limited Company
Prospectus
Under the Companies Act, 2013, a public limited company must issue a prospectus that showcases the company’s business affairs, to the public.
Name
As per Companies Act, 2013, it is mandatory for all the public companies to end their name with the word “Limited”.
Limited Liability
Public Limited Company limits the liability of each shareholder by making the owners jointly & severally liable for the business’s debts.
Benefits of Public limited companies
- Additional Capital
Shares offered to the common public in large, allowing everyone to invest in the company, bring additional capital for the company.
- Increased Popularity
Listing on a stock market platform increases the popularity of the PLC’s business among the traders dealing in mutual funds, hedge funds, etc which further opens up avenues for business opportunities for the Company.
- Divided Risk
The risk of the market gets divided with the allotment of shares among the general public in large.
- Success and Business Expansion
Divided risk, increased publicity and additional capital together lead to the opportunities for business expansion & success and investment in new profitable projects.
Requirements for the Incorporation Public Limited Company
Companies Act, 2013 has listed the following requirements for the incorporation of a Public Limited company
Minimum 3 Director and 7 Members
Minimum 3 Directors and 7 Members are required to incorporate Public Limited Company.
PAN Card
Self-attested PAN Card of Members and Directors.
Identity Proof of Directors
Self-attested ID proof of Members and Directors- (Anyone out of the following -Valid Passport/Voter ID/Aadhar Card/Valid Driving License)
Address Proof
Self attested Address proof of the Members and Directors (Any one out of the following - Bank Statement/ Electricity Bill/ Telephone Bill/ Mobile Bill which and it should be not older than 2 months
Passport Size Photo
2-2 Passport Size Colored Photos of Members and Directors.
Business Address Proof (Owned/Rent/Leased)
NOC from the Owner of Property/Property Papers (Title Deed)/Utility Bill (Either Electricity Bill or Mobile Bill or Telephone Bill) (Should Not be Older than 2 Months)
Documents Required For Incorporation Of A One Person Company
Companies Act, 2013 has listed the following requirements for the incorporation of a Pvt. Ltd. companY
Minimum One Directors
Member: Member is a person who buys and holds shares in a company having a share capital. They become a member once their name is entered on the register of members. Director: A director is a person who leads or supervises a particular business of a company.
PAN Card
Self-attested PAN Card of Members and Directors.
Identity Proof of Directors
Self-attested ID proof of Members and Directors- (Anyone out of the following -Valid Passport/Voter ID/Aadhar Card/Valid Driving License)
Address Proof
Self-attested Address Proof of Members and Directors and Should Not be Older than 2 Months (Anyone out of the following – Bank Statement/Electricity Bill/Telephone Bill/Mobile Bill)
Passport Size Photo
Passport Size Photo 2-2 Passport Size Colored Photos of Members and Directors.
Business Address Proof (Owned/Rent/Leased)
NOC from the Owner of Property/Property Papers (Title Deed)/Utility Bill (Either Electricity Bill or Mobile Bill or Telephone Bill) (Should Not be Older than 2 Months)
Requirement Of Information
- Authorized and Paid-up Share Capital of the Proposed Company. Explanation: A Company can be started with any amount of capital.
There is no need for a minimum amount of capital of Rs. 100,000. - Place of Birth and Duration of Stay of Members and Directors at Present Residential Address.
- Occupation of Members, Nominee and Directors.
- Proposed Object/Business of the Proposed Company.
- Educational Qualification of Members, Nominee and Directors.
- Email IDs and Contact Number of Members, Nominee and Directors.
Process of Registration
The Ministry of Corporate Affairs vide its notification dated 18th February 2020 effective from 23rd February 2020 has further amended the Companies (Incorporation) Rules, 2014 thereby substituting the old Form INC-32 (SPICe) with web service SPICe+ along with certain other amendments.
1. An application for Name Reservation
The first step is to make an application for reservation of name which shall be reserved by using the web services (SPICe+) available at www.mca.gov.in along with the specified fees. Before Applying for the name, kindly check that the name is available on MCA as well as no trademark. Is there no such name under the Class of work you are going to apply.
The same can be checked by clicking on the link below: Trademark Registration
The new integrated form consists of two parts i.e. PART A and Part B. The Name(s) of a company can be reserved in Part A of SPICe+. In case the applicant wants to apply for name, incorporation, and other integrated services together, he can do so together by filling necessary information in Part A and Part B.
2. Fill Part B of SPICe+
The second step is to fill the Part B of SPICe+ for registering the Company. The said form contains various sections that allow you to save and modify information if required.
3. Convert SPICe+ Form into PDF
The third step is to convert the SPICe+ form into a pdf format to affix the DSC.
4. Upload the form on MCA
After affixing the DSC the form is required to upload on the Ministry of Corporate Affairs following the existing process.
5. Declaration of the Company’s Directors and Subscribers
Declaration of all Subscribers and first Directors of the company which is currently being filed in Form INC-9 will be automatically generated in pdf format and shall be submitted only through Electronic form in all cases, except in case:
• The no. of subscribers and/or directors is more than 20.
• Any of the subscribers and/or directors do not have DIN and PAN
Recent Amendments and the Changes
1. No need to mention SRN
There is no need to mention SRN for names reserved in Part A of SPICE+ as the same will be automatically displayed while filing Part B after filing of Part A.
2. Mandatory Registration for ESIC and EPFO
Registration for ESIC and EPFO has been made mandatory for all new companies that are incorporated w.e.f 23rd February 2020.
3. Professional Registration for Maharashtra
Professional registration is mandatory for all new companies established in the State of Maharashtra, w.e.f. February 23, 2020.
4. Mandatory Application for opening a bank account
Application for opening of a bank account has become mandatory for all new companies incorporated w.e.f 23rd February 2020 the same application shall be filed through the AGILE-PRO linked web form.
5. Declaration of Company’s Subscribers and First Directors in PDF form & e-submission
Declaration of all Subscribers and First Directors of the Company which is currently being filed in Form INC-9 will be automatically generated in pdf format and shall be submitted only through Electronic form in all cases, except in case:
• The no. of subscribers and/or directors is more than 20.
• Any of the subscribers and/or directors don’t have DIN and PAN.
6. Mandatory use of e-MoA (INC-33) and e-AoA (INC-34) (in some cases)
It is mandatory to use e-MoA (INC-33) and e-AoA (INC-34) in case the number of subscribers is up to 7 and in the following scenarios:
• Individual subscribers are Indian nationals
• Individual subscribers who are foreign nationals in case they valid DIN and DSC and also submit proof of a valid business visa
• Non-individual subscribers based in India.
7. Signed Physical Copies of the MoA / AoA (in some cases)
Physical copies of the MoA / AoA must be signed and attached if the individuals’ first subscribers are located outside India or if the individual outsourcers do not have a valid business practice or any of the following scenarios: –
| S. No. | Cases | Forms to be filed |
| 1. | Non-Individual first subscriber based outside India | SPICe+ (INC-32) with apostille MOA and AOA as attachments |
| 2. | Non-Individual first subscriber based in India | SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34) |
| 3. | Indian National being Subscriber other than Director | SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34) |
| 4. | Indian National being Subscriber-cum-Director | SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34) |
| 5. | Foreign National being Subscriber other than director having valid DIN | SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34) along with Valid Business Visa to be submitted. In case Business Visa is not available, apostille MOA and AOA shall be attached and in such cases, e-MOA (INC33) and eAOA (INC-34) are NOT acceptable. |
| 6. | Foreign National being Subscriber-cum-Director having valid DIN | SPICe+ (INC-32) with linked filing of e-MOA (INC-33) and e-AOA (INC-34) along with valid Business Visa to be submitted. In case Business Visa is not available, apostille MOA and AOA shall be attached and in such cases, e-MOA (INC33) and e-AOA (INC-34) are NOT acceptable. |
| 7. | Foreign National being Subscriber-cum-Director not having valid DIN | SPICe+ (INC-32) with apostille MOA and apostille AOA as attachments. |
Note: In all the above-mentioned cases, the maximum number of subscribers allowed shall be 7 for filing of SPICe+ form. Wherever the number of subscribers exceeds 7, SPICe+ form shall be filed with MoA and AoA as attachments.
8. Mandatory Filing of Statutory Return
Companies newly incorporated through SPICE+ and who have obtained EPFO/ESI number will have to file Statutory Return only if the prescribed threshold limit has been exceeded.
A Public limited company gets all the benefits that a Private Limited Company enjoys. Besides, a PLC can have an unrestricted number of members and it can easily transfer the shareholding. Public Limited Registration can be easily and legally accomplished by Public Limited Company Registration Consultants.
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FAQs on Public Limited Company
For which type of business, the Public Limited Company registration will be benefited?
The Public Limited Company is best suited for the large business operating entities as helps them in availing the loans easily and making them able to reach people at large also It provides them the credibility and a image of their business in the eye of financial institution, suppliers & potential clients.
For how long a name a approved name is valid?
An approved name shall be valid for a period of 20 days from the date of approval of such name.
How many Directors and Members are required to form a Private Limited Company?
A private limited company must have minimum 3 directors and can have a maximum of 15 directors and a minimum of 7 shareholders are required maximum number of shareholders is no limit.
Whether a Director or a Shareholder be the same?
Yes, a person can become a Director as well as a shareholder and vice versa as a Company is a Separate Legal Entity.
What are the minimum capital requirement for forming a Private Limited Company ?
As per Companies Act, 2013 there is no minimum capital required for incorporating a Public Limited Company but generally people prefer and advised to incorporate the same with a minimum capital of INR. 5 Lacs.
Can a NRI or a Foreign National be a Director or Shareholder of a Company?
Yes, a NRI or a Foreign National can become a shareholder and Director (post obtaining the Director Identification Number). However one Director of the Company should be Indian Resident.
In how much time the subscription money is to be deposited?
A Member who has agreed to subscribe the shares shall be required to deposit the money in the bank account at the earliest and shall file a form for commencement within 180 days from the date of incorporation of the Company.
Can the amount deposited above be withdrawn from the Bank Account?
No, the money deposited cannot be withdrawn but the same can be used by the Company for its official purpose like for paying salary to staff members and employees, other administrative expenses etc.
Can a Public Limited Company carry multiple business under one style of name?
Yes, a Public Limited Company can carry on multiple related business activities if the same is mentioned in the company’s objects which must be approved by the registrar. one cannot operate entirely different business activities like construction and the food company under one name but related activities can be performed.
Whether a PAN Card is mandatory for the Indian residential for becoming a member or a Director in the Company?
Yes, the Indian nationals are required to have a PAN Card for becoming a Director/Member in a Company and Passport is mandated in case of Foreign Nationals.
Can a residential address of a person be used as the Registered Office address?
Yes, a person can use its residential address as the Registered Office address of the Company as the Companies Act, 2013 doesn’t prohibits the same.
Can a Public Limited Company issue shares to public at large?
Yes, a Public Limited Company can easily issue shares and deal with public at large.
How can a Public Limited Company transfer its shares?
One can only transfer the shares by complying with the rules & regulations of Companies Act, 2013 and it is necessary for the public Limited company to get the shares in dematerialized form with NSDL/CDSL before transferring the shares or before inducing the capital in the company.
What is a Digital Signature Certificate?
DSC refers to a Digital Signature Certificate. It is to be obtained from a certifying agency which shall be recognized by the government. Since the registration process is now done online, all the forms with respect to requiring a valid DSC shall be filled online. The cost of obtaining DSC varies from each of the certifying agency.
What is Memorandum of Association and Articles of Association ?
The Memorandum of Association is the main document of a Company representing the charter of the company while the Articles of Association refers to the internal rules & regulations of the company. These documents are required for the incorporation of a company and needs to be filed with the MCA.
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