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Public Limited Company

14,160.00 12,978.82

Description

Registration of a Public Limited Company

Incorporating a Public Limited Company is a suitable option for large scale businesses that require huge capital. There should be a minimum of seven members with no limit on maximum number of members/shareholders for starting a Public Limited Company.

Usually, Public Limited Companies get listed with stock exchanges to raise capital from the general public. This is why Public Limited Companies have to comply with multiple regulations of the government and starting a public limited company becomes a cumbersome process.

What is a Public Limited Company?

A Public Limited Company is defined under Section 2(71) of the Companies Act, 2013 as:

a company which is not a private company

a company with a minimum paid-up share capital of INR 5 lakhs.

Note : Under the Companies Act, 2013, a subsidiary company shall be deemed to be a public company if it is not a subsidiary to a private company, even if it is a private company as per its articles.

Checklist for Incorporating a PLC

Minimum Paid-up share Capital              INR 5 lakhs

Minimum number of Directors                3

Maximum number of Directors               50

Minimum number of Shareholders        7

Maximum number of Shareholders       No LiProcess of Registration of a Public Limited Company

Fulfilling all the Legal Requirements for Incorporation

  • First off, it is necessary that the legal requirements of minimum-paid up share capital, number of directors, number of shareholders, have been identified and fulfilled. Only if this step is complete, further steps of registration can be implemented.

Obtaining DIN and DSC for all the Proposed Directors

  • Once it has been established who all would be the directors of the company, their DIN from the Ministry of Corporate Affairs and DSC from the Certified Authority has to be obtained.
  • The directors can only be individuals and not entities like LLPs or Financial Institutions. Also, the number of directors cannot exceed 50. It is not necessary for the Director to be the Shareholder of the Company

Registered Office

  • It is necessary to have a proper address to be recognized as the Registered Office of the Company. The Registered Office address has to be registered with Registrar of Companies (ROC) under whose jurisdiction the office location falls. All the correspondence related to business are made to the Registered Office by the ROC. The fee for registration shall be dependent on the authorized capital of the company.

Application for Company Name

  • Prior to the registration procedure, the name of the Company has to be approved by the ROC. It is mandatory that the name of the Public Limited Company ends with the word “Limited”. This application is filed in the RUN form of the Ministry of Corporate Affairs. It is better to provide a list of names in order of preference, in case a particular name is not available.

Execution of Company Registration Documents

  • Once the name of the Company has been approved, the crucial documents of the Company – MoA and AoA have to be executed. These documents have now gone electronic and can be prepared and submitted there itself. (eMoA: INC33 & eAoA: INC32)

Submission of Documents to ROC

  • Once all the documents have been prepared, they are submitted to the ROC for verification.

Registration and COI

  • Upon proper verification of all the submitted documents, the ROC registers the company and issues a Certificate of Incorporation along with the CIN (Corporate Identification Number) of the Company.

Certificate of Commencement of Business

  • A Public Limited Company cannot start its business immediately upon receiving the COI. It has to apply for Certificate of Commencement of Business within 180 days of receiving the COI, stating that all the subscribers have paid the subscription money.

Advantages

  • Separate Legal Entity : A Public Limited Company is considered as a separate legal entity from its shareholders. It has a perpetual existence and can have its own PAN, bank accounts, approvals, contracts, licenses, assets and liabilities.
  • Multiple avenues of funding : Public Limited Company can raise funds from individuals as well as from financial institutions. The funds may be raised via equity shareholding, preference shareholding or debentures.
  • Easy transferability of shares : This is one of the biggest advantages of a Public Limited Company. The shares can be easily transferred by a shareholder to other legal entities – be it an individual or an organization, in India or abroad. The directorship of the company can also be changed for ensuring business perpetuity.
  • Limited liability : The shareholders of a Public Limited Company are given Limited Liability Protection. In a situation of unexpected liability, the same would be limited only to the company and not affect the shareholders.

What is Authorized capital fee ?

Authorized capital of a Company is the amount of shares a company can issue to it shareholders. Companies have to pay the Government an authorized capital fee to issue shares in a Company. Companies have to pay authorized capital fee for a minimum of Rs.5 lakhs.

Is an office required for starting a Limited Company ?

An address in India where the registered office of the Company will be situated is required. The premises can be a commercial / industrial / residential where communication from the MCA will be received.

What is the capital required for start a Limited company ?

You can start a Limited Company with any amount of capital. However, fee must be paid to the Government for issuing a minimum of shares worth Rs.5 lakhs [Authorized Capital Fee] during the incorporation of the Company. There is no requirement to show proof of capital invested during the incorporation process..

How many people are required to incorporate a Limited Company ?

To incorporate a Limited Company a minimum of seven people are required. A Limited Company must have a minimum of three Directors and seven shareholders

What is the Process of Registration of a Public Limited Company

 

Fulfilling all the Legal Requirements for Incorporation

  • First off, it is necessary that the legal requirements of minimum-paid up share capital, number of directors, number of shareholders, have been identified and fulfilled. Only if this step is complete, further steps of registration can be implemented.

 

Obtaining DIN and DSC for all the Proposed Directors

  • Once it has been established who all would be the directors of the company, their DIN from the Ministry of Corporate Affairs and DSC from the Certified Authority has to be obtained.
  • The directors can only be individuals and not entities like LLPs or Financial Institutions. Also, the number of directors cannot exceed 50. It is not necessary for the Director to be the Shareholder of the Company

 

Registered Office

  • It is necessary to have a proper address to be recognized as the Registered Office of the Company. The Registered Office address has to be registered with Registrar of Companies (ROC) under whose jurisdiction the office location falls. All the correspondence related to business are made to the Registered Office by the ROC. The fee for registration shall be dependent on the authorized capital of the company.

 

Application for Company Name

  • Prior to the registration procedure, the name of the Company has to be approved by the ROC. It is mandatory that the name of the Public Limited Company ends with the word “Limited”. This application is filed in the RUN form of the Ministry of Corporate Affairs. It is better to provide a list of names in order of preference, in case a particular name is not available.

 

Execution of Company Registration Documents

  • Once the name of the Company has been approved, the crucial documents of the Company – MoA and AoA have to be executed. These documents have now gone electronic and can be prepared and submitted there itself. (eMoA: INC33 & eAoA: INC32)

 

Submission of Documents to ROC

  • Once all the documents have been prepared, they are submitted to the ROC for verification.

 

Registration and COI

  • Upon proper verification of all the submitted documents, the ROC registers the company and issues a Certificate of Incorporation along with the CIN (Corporate Identification Number) of the Company.

Certificate of Commencement of Business

  • A Public Limited Company cannot start its business immediately upon receiving the COI. It has to apply for Certificate of Commencement of Business within 180 days of receiving the COI, stating that all the subscribers have paid the subscription money.

What is the capital required for start a Limited company ?

You can start a Limited Company with any amount of capital. However, fee must be paid to the Government for issuing a minimum of shares worth Rs.5 lakhs [Authorized Capital Fee] during the incorporation of the Company. There is no requirement to show proof of capital invested during the incorporation process.

How many people are required to incorporate a Limited Company ?

To incorporate a Limited Company a minimum of seven people are required. A Limited Company must have a minimum of three Directors and seven shareholders.

 

What is Authorized capital fee ?

Authorized capital of a Company is the amount of shares a company can issue to it shareholders. Companies have to pay the Government an authorized capital fee to issue shares in a Company. Companies have to pay authorized capital fee for a minimum of Rs.5 lakhs.

 

Is an office required for starting a Limited Company ?

An address in India where the registered office of the Company will be situated is required. The premises can be a commercial / industrial / residential where communication from the MCA will be received.