Public Limited Company

Introduction

A Public Limited Company is a popular type of corporate entity in India. Application for registration in prescribed format will be submitted before Registrar of Companies (under Ministry of Corporate Affairs) thereafter Registrar issue a Certificate of Incorporation and Certificate of Commencement of Business.

Formation of company

A public company may be formed for any lawful purpose by seven or more persons, where the company to be formed is to be a private company;

A company formed may be either—

(a) a company limited by shares; or

(b) a company limited by guarantee; or

Characteristics of Public Limited Company

Members– To start a public limited company, minimum number of seven members is required and maximum number is unlimited as per the provisions of the Companies Act, 2013.

Limited Liability– The liability of each member or shareholders is limited according to his share. It means that if a company faces loss under any circumstances then its shareholders are not liable to sell their own assets for payment. Thus, the personal, individual assets of the shareholders are not at risk.

Perpetual succession– The company keeps on existing in the eyes of law even in the case of death, insolvency, the bankruptcy of any of its members. This leads to perpetual succession of the company.

Life– The life of the company keeps on existing forever.

Index of members– A public company has keep an index of its members whereas the public company is required to maintain an index of its members, the maintenance of index is necessary.

A number of directors– Public limited companies are headed by a board of directors. Composition of the board of directors is set out in the company’s articles of association. Normally it comprises of a minimum number of three members and a maximum of 15. The company may appoint more than 15 directors after passing a special resolution. These are elected by the shareholders during the annual general meeting. They act as the representatives of the shareholders in the management of the company.

Paid up capital– Public limited companies enjoy an increased ability to raise capital since they can issue shares to the public through the stock market. They can also raise additional capital by issuing debentures and bonds through the same market from the public. Debentures and bonds are in the form of secured or unsecured debts issued to a company on the strength of its integrity and financial performance by the general public or its members etc

Prospectus– Prospectus is a detailed statement of the company affairs which is issued by a company for its public. However, in the case of private limited company, there is no such need to issue a prospectus because in this type of companies, public is not invited to subscribe for the shares of the company.

Minimum subscription– It is the amount to be received by the company on the shares to be issued within a certain period of time. If the company is not able to receive such amount then they cannot commence further business. In case of private limited company shares can be allotted without receiving the amount of such minimum subscription since such amount is required to be stated in the prospectus which is not applicable and required in the case of private companies.

Name– A unique name with for all the private companies to use the word “private limited” after its name. The Ministry of Corporate Affairs will be the final authority to approve the name based on the availability rules and regulations.

Registered Office– The registered office of a company does not have to be a commercial space. Even a rented home can be the registered office, so long as a NOC is obtained from the landlord.

Start of business– Public Limited Company will be start business just after receiving of Certificate of Commencement of Business

Transferable shares– Shares of a public limited company are bought and sold in a stock exchange market. They are freely transferable between its members and people trading in the stock exchange.

Life Span– A public limited company is not affected by death of one of its shareholders, but the shares are transferred to the next kin or legal heir of such deceased shareholder and the company continues to run its business as usual. In the case of a director’s death, the Board is empowered to fill the resulting casual vacancy may be filled by Board of Directors at Board meeting which shall be subsequently approved by members in the immediate next general meeting.

Financial Privacy– Public limited companies are strictly regulated and are required by law to publish their complete financial statements annually. This ensures that they reveal their true financial position to their owners and to potential investors so that they can determine the true worth of its shares.

Have separate legal entity?

Yes

Minimum requirements to establish

- Suitable Name suffix with Ltd Co. (in case of limited by share) or

- Suitable Name suffix with Co. (in case of unlimited liability) or

- Minimum 7 members as shareholders

- Appoint minimum 3 directors

- Minimum Capital not specify but in general 5 lakh or as per the state

Name of Company

Founder or its shareholders in its meeting of Public Limited Company has right to choose any name except some names which are restricted as per the Emblems and Names (Prevention of Improper use) Act, 1950.

Minimum Capital Required

Minimum Capital not specify but in general 5 lakh or as per the state

Minimum & Maximum members required

Minimum 7 people called Share-holders

Maximum unlimited people called Share-holders

Transfer to other

Any shareholder has right to transfer his/her share to others or legal hairs

Registration required

Yes, this is mandatory to registration in the Companies Act

PAN of the company is mandatory to filing company returns

Registration optional

Applicable some other registration-

- in Shop and Establishment act from the Municipal Corporation

- in GST if applicable by your turnover from the GST portal

- in PF & ESI from Provident Fund & Employees State Insurance Corporation

- in Fire Safety from Fire Department

- in FSSI as FSSI license etc

Required documents to starting business

- PAN of shareholders

- Aadhar of shareholders

- Passportsize photograph

- Memorandum & Article of company

Bank Account

Open a bank current account just after registration of the company. Every transaction will be made through company’s account instead of personal bank account.

For the opening of bank account following document required-

- A copy of Memorandum & Article of association (company)

- A copy of Incorporation Certificate of Company

- A copy of Certificate of Commencement of Business

- Minutes of the company

- Directors authority

- Directors PAN & Aadhar

Winding up

Once company is incorporated that will be not easy to winding up. Companies Act already prescribed the procedure of winding up.

Start your business within 3 days, we are ready to assist you

Days	Step	Process
Day 1	Step 1	Discussed with necessary formalities & registration process
	Step 2	Apply and collect DSC (Digital Signature Certificate) of directors
	Step 3	Apply & Allotment of DIN (Directors Identification Number)
Day 2	Step 4	Check availability and apply for approval of the name of company (The Ministry of Corporate Affairs will be the final authority to approve the name based on the availability rules and regulations)
	Step 5	Draft Memorandum & Article of company
	Step 6	Name Approved
	Step 7	Final Memorandum & Article of company
Day 3	Step 8	Apply for registration with required documents
Day 3	Step 9	Collect the Certificate of Incorporation
Start	Step 10	Collect the Certificate of Commencement of Business

Our experts will provides full assistance and professional guidance on many of the processes involved in registering your business, GST, import/export code, PF/ESI or Shops and Establishments License, draft any deed, accounting method, returns formalities & filing etc.

>> Start/incorporate Your Public Ltd Co. at Rs. 9,999/- only <<

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