A public limited company in India has all the privileges and rights of a corporate entity in addition to the advantages of limited liability. Contact Vakilsearch because their legal professionals are among the best and most qualified in the field of Public Limited Company Registration.
For business owners who intend to run large-scale activities, registering a public limited company in India is the best option. There is no maximum number of shareholders or members that can form a Public Limited Company Registration in India; however, there is a minimum requirement of seven members. A limited liability corporation that sells shares to the general public is referred to as a public limited company under the Business Act of 2013. Read more to know about the Advantages of Public Limited Company in detail.
A public limited company is subject to strict regulations and is obligated to disclose to its shareholders its actual financial situation. In this article, you will learn about Public Limited Company Registration and how a public limited company must have a minimum of directors.
What Does a Public Limited Company Mean?
A limited liability corporation that offers shares to the general public is referred to as a public limited company under the Business Act of 2013. Anyone may buy its stock or shares through stock market transactions or a private initial public offering (IPO). A Public Limited Company has to be registered in accordance with the Companies Act of 2013’s regulations. The benefits of limited liability are available to members of limited companies registered in India, and these companies are also permitted to generate money from the general public by issuing shares.
Additionally, compared to a private limited company, the laws and restrictions of a public limited company are stricter and more inflexible. However, it is preferable to create a public limited company because it offers the advantages of a private limited company with characteristics like ownership of shares and simple transferability.
Advantages of Public Limited Company in India
- It is simple to transfer shares:
One of the main benefits of a public limited company is the ease with which a shareholder can transfer shares to other legal persons, whether they are people or organisations in India or abroad. In addition, for the purpose of ensuring the continued existence of the corporation, the director may also be replaced.
- Separate legal entity:
Public limited companies are regarded as distinct legal entities from their stockholders. In addition to having a bank account, a PAN, approvals, licences, contracts, obligations, and assets, public limited companies also have a continuous existence.
- Limited Liabilities:
A Public Limited Company offers limited liability protection to its stockholders. In the event of an unforeseen liability, the same would only apply to the corporation and would not have any bearing on the owners.
- Several financing sources:
A public limited corporation can raise money from financial institutions and from private investors. Additionally, equity shareholding, preferential shareholding, or debentures can also be used to raise money.
- Possibilities for growth:
Given the company’s substantial capital base, there are also a lot of development opportunities, especially if the company is open-ended.
What Are the Requirements for Registering a Public Limited Company?
The Companies Act of 2013 specifies the number of different laws and regulations for the creation of a Public Limited Company in India.
The following is a list of things to keep in mind when registering a public limited company:
- For the purpose of choosing the company name, an application must be submitted.
- A authorised share capital of at least ₹ 5 lakhs is needed.
- Applicants must submit a form that includes the company’s primary object clause. The primary goals of a Company after incorporation will be specified in this object clause.
- A public limited company must have at least seven shareholders in order to be formed.
- When submitting self-attested documents of identification and proof of address, the digital signature certificate of any one of the Directors is required.
- Forming a Public Limited Company requires a minimum of Three Directors.
- DIN is required for the Directors.
What Is the Process for Obtaining Public Limited Company Registration?
Step 1: You must first ensure that all legal criteria, including the minimum, paid-up share capital, and the number of directors and shareholders, have been met. Only when this step has been finished will the other registration steps be finalised.
Step 2: The following action is to get the DSC and DIN for the company’s directors. Just a natural person, not another person or an entity like an LLP or a financial institution, is eligible to serve as a director. The director does not always have to own stock in the company.
Step 3: The Company must have a valid address in order to be recognised as a principal place of business. It is mandatory to enter the Registered Office Address with the Company Registrar, whose jurisdiction the Office comes under. All business-related correspondence will be sent to the registered Office of the company, so make sure to fill it out accurately. The registration fee is going to be based on the company’s authorised capital.
Step 4: The Company’s name must first receive ROC approval before the registration process can begin. The name must include the term “Limited” at the end for such a Public Limited Company. This application must be submitted through the Ministry of Corporate Affairs’ RUN form. In the event that a particular character is not obtainable, it is preferable to submit a list of names arranged in the order of preference.
Step 5: The MoA and the AoA, which are two of the company’s most important documents, must be signed after the name of the company has been approved.
Step 6: After the documents are ready, they must be submitted to the ROC for validation.
Step 7: Following completion of the verification, the ROC registers the business and issues the incorporation certificate, which includes the firm’s CIN.
Step 8: After acquiring the COI, the firm cannot be launched right away. Within 180 days of receiving the COI confirming that each subscriber has made their subscription payment, the business must file for a license of commencement.
Conclusion
In India, registration of a public limited company grants it all the rights and benefits of a corporate body, along with the crucial advantage of limited liability. When a public limited company seeks to raise capital from the general public, it opts to list on the stock exchange. Therefore, to establish a public limited company, adherence to numerous government laws governing the registration of company in India is essential. For expert guidance in navigating these legal requirements seamlessly, Vakilsearch offers access to some of the best and most knowledgeable legal officers in the field of Public Limited Company Registration.
