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Registration of a Public Limited Company

This article contains information regarding how a public limited company is registered and a guide as to how it’s done step by step.

Public limited corporations are probably the best option for medium and smaller businesses looking to raise equity capital from the general public since they have all the rights of a corporate organisation with limited liabilities.

A Public Limited Company is registered in accordance with the requirements of the Companies Act of 2013. A public business benefits from limited member liabilities and has the option to sell shares to raise more money. It has stricter laws and restrictions than a Private Limited Company and can be incorporated with as few as three directors.

Although there is no restriction on the number of members, there must be a baseline of seven. It provides all the benefits of a private limited company in addition to increased transparency and straightforward share and ownership transactions. Any public limited company can be differentiated from a private limited company by a variety of characteristics, including its title, shares, date of formation, number of individuals, administration, and directors.

Documents Needed to Register a Public Limited Company

  • Identity proof, like Aadhar card, PAN card, or voter ID of all the designated shareholders and directors
  • Address proof of all the shareholders and directors
  • PAN card details of all the members, directors, shareholders, etc
  • Address details and proof of the office or the “business place”. It could be the electricity or water bill of the registered office and should not be older than two months
  • A Non-Objection Certificate from the landlord of your office or business place
  • Digital Signature Certificate (DSC) of the designated directors
  • Article of Association (AOA)
  • Memorandum of Association (MOA).

Benefits of Registration of a Public Limited Company

  • Capital Growth

The general public is welcome to purchase shares in a public limited company. Therefore, anyone can invest in a public company that raises the proposed company’s capital.

  • Fewer Risks

The company’s shares can be sold to the public, which decreases the risks from the market and make it safer.

  • More Borrowing Capacity

A public corporation has an access to an infinite number of avenues for borrowing money. By selling its shares, it can issue stock, debentures, and accept deposits from the general public. Additionally, the majority of financial institutions believe public corporations to be more significant than other unregistered businesses.

  • More Opportunities to Grow Financially

The general public is welcome to purchase shares in a public limited company. Therefore, anyone can invest in a public company that raises the proposed company’s capital.

  • Limited Liabilities for Shareholders

Shareholders of public companies benefit from limited liabilities, which protect their assets and prevent them from being utilised to pay off the company’s debts and losses. However, the shareholders are still liable for whatever legal violations they may have committed. This right is enjoyed by all members, directors, and shareholders, and no bank, creditor, or government agency may seize their assets.

  • Given More Preference

As compared to other business structures, banks favour public limited companies more when it comes to loaning money.

  • Separate Legal Entity

A public limited company is recognised as a distinct legal entity. This implies that a company’s existence is distinct from those running and/or owning the entity. 

  • Company’s Prospectus

In the case of public limited companies, the release of a prospectus is regarded as required. The prospectus serves as a thorough note about the activities and business of the company. Additionally, raising money is the main reason for releasing the prospectus to the broader public. Private limited companies are exempted from this requirement because they are not allowed to raise money from the general public.

Requirements to Form a Public Limited Company

  1. The company should have a minimum of seven shareholders to register.
  2. A minimum share capital of ₹5,00,000 is required.
  3. The company must have a minimum of three directors. 
  4. You should have a Digital Signature Certificate of at least one director.
  5. All directors must get a Director Identification Number (DIN).

Procedure to Register a Public Limited Company

  • Applying for Digital Signature Certificate

The Digital Signature Certificate for each proposed director in the firm must first be requested. The e-forms are signed using DSC, which is a reliable and secure way to store all the paperwork online. This document must be used. A director who has self-attested copies of their identity proof can readily receive DSC from the closest Certifying Authorities or CAs. A DSC can be obtained in 1 to 3 working days.

  • Verifying the Company’s Name

Members of the company must check the availability of a name in the second stage by going to the Ministry of Corporate Affairs’ official website. The following step after entering the MCA portal is to choose the MCA services and then check the name availability. The name must not be already used or registered.

  • Filling up the Spice+ Form

The applicant is now qualified to submit the SPICe+ form in order to get the Certificate of Incorporation after the proposed name has been authorised. Additionally, the applicant must submit the form along with all necessary documents, including the MOA and AOA. 

These two documents also include a definition of a proposed firm as well as all the information on the mission, vision, objectives, goals, and business operations. They also include information on the roles and responsibilities of directors and shareholders.

  • Getting the Certificate of Incorporation

The firm would obtain the Certificate of Incorporation, which would include CIN and date of incorporation, once all applications and documents were submitted to the authorities for review.

  • Availing of PAN and TAN

The members and directors of the company can now submit an application to the MCA for the Permanent Account Number and Tax Deduction Account Number in the name of the firm once it has received its Certificate of Incorporation from the Ministry of Corporate Affairs.

Conclusion

That concludes the process of registering your Public Limited Company. If you follow the aforementioned steps and ensure you meet all the requirements, you’ll be good to go. If you’re still unsure of how you can register your Public Limited Company, you can get professional help from us at Vakilsearch. Vakilsearch is one of the most reliable legal services platforms; feel free to contact us at our official website for any queries.

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