Overview of Public Limited Company Registration
In India, a Public Limited Company or PLC is the best business model for those embryonic entrepreneurs, who are planning big and dynamic, such as opening an IT company, setting-up of a manufacturing plant, etc.
Also, a Public Limited Company has all the rights and privileges that of a corporate entity, together with the characteristic of Limited Liability.
Moreover, some of the prominent examples of PLC are TATA Steel Limited and Reliance Communications Limited.
Concept of Public Limited Company
The term “Public Limited Company” is defined under section 2 (71) of the Companies Act 2013. It is a business model that has the feature of Limited Liability and raises capital from the general public by issuing shares in return. Further, a minimum of 3 directors and 7 members are needed for its incorporation.
Also, it shall be relevant to state that as per Companies (Incorporation) Rules 2020, there is no minimum capital requirement for a Public Limited Company.
Moreover, a subsidiary company for the purpose of registration shall be deemed to be a Public Company, even though it is listed as a private ltd company in its Articles.
Benefits of a Public Limited Company
The benefits of a Public Limited Company are as follows:
The liability of a member is restricted to the extent of sum remaining unpaid on the shares held by him/ her.
Given More Preference
Banks give more preference to PLC than Private Ltd Companies when it comes to offering loans.
Transfer of Shares
Shareholders of a Public Limited Company have the right to transfer or sell their shares.
Listing on the Recognised Stock Exchange:
A Public Limited Company (PLC) can easily list its shares on an RSE (Recognised Stock Exchange).
The existence of this business structure will not be affected by the insanity, death, retirement, and insolvency of any member.
A Public Limited Company can acquire improved capital by getting its share subscribed by the general public.
A Public Limited Company can sell its shares to the general public, which leads to a reduction in the scope of market risks.
Features of Public Limited Company
The basic features of a Public Limited Company are as follows:
Number of Directors and Members
A Minimum of 3 Directors and 7 Members are needed for registering a Public Limited Company in India.
Name of the Company
A Public Limited Company (PLC) needs to mandatorily add word “Limited” as a suffix at the end of its name. Further, the same is denoted as an Identity for a Public Limited Company.
Separate Legal Entity
A Public Limited Company is a Separate Legal Entity. That means the existence of the company is distinct from its members.
Every PLC needs to issue prospectus with regards to its operations and business activities. Further, the main aim behind the issuance of the prospectus is to raise capital and funds from the general public.
Paid-up Share Capital
As per the provisions of the Companies (Incorporation) Rules 2020, there is no minimum capital requirement for obtaining Public Limited Company Registration.
The members of PLC benefits from the feature of Limited Liability. That means the liability of a member is only to the extent of the sum remaining unpaid on the equity shares subscribed by him/ her.
Transferability of Shares
All the members of a Public Limited Company have the right to transfer the ownership of their shares.
Things to Consider for Public Limited Company Registration
The things to consider for the Public Limited Company Registration are as follows:
- A minimum of 7 shareholders;
- A minimum of 3 directors;
- Digital Signature Certificate for at least one of the proposed directors;
- Director Identification Number for all the proposed directors;
- An Application including of the Object Clause of the company;
- Submission of the application to Registrar, together with the required documents, such as MOA and AOA;
Documents Required for Public Limited Company Registration
The documents required for obtaining Public Limited Company Registration are as follows:
- Identity Proof for all Directors;
- Identity Proof for all Members;
- Address Proof for all Directors;
- Address Proof for all Shareholders;
- Utility bills in the form of gas, telephone, water, or electricity bill of the place being used as the Registered Office;
- An NOC (No Objection Certificate) from the landlord of the premise being used as the Registered Office;
- Directors Identification Number for all Directors;
- Digital Signature Certificate for all Directors;
- A copy of Memorandum of Association (MOA);
- A copy of Article of Association (AOA);
Procedure for Public Limited Company Registration
The steps involved in the procedure for registering a Public Limited Company are as follows:
Obtain DSC and DIN
In the first step, there is a need to obtain DIN and DSC for directors. Further, all the partners must have DIN (Director Identification Number), and at least one needs to have DSC (Digital Signature Certificate) with him/ her.
Apply for Name Approval
In the next step, the members of the company need to check the availability of name by visiting the official portal for MCA.
Further, he/ she needs to select the option “MCA Services” to check for the availability of the name. However, one needs to note that the proposed name must not be an existing registered name.
Filing Form SPICe+
After obtaining name approval, the company needs to file the SPICe form for availing COI (Certificate of Incorporation). Further, it needs to attach MOA and AOA as well with the SPICe form.
Obtaining Certificate of Incorporation
After the submission and verification of all the documents, the authorities will issue COI to the company. Further, this document will include both CIN (Corporate Identification Number) and DOI (Date of Incorporation).
Availing PAN and TAN
After acquiring COI, the directors and the members of the company needs to apply for PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) Registration by filing an application with the MCA.
Open a Bank Account
Lastly, with the help of both COI and PAN Card, the directors can now easily apply for a bank account in the company’s name.
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Frequently Asked Questions
A minimum of 3 directors and 7 shareholders are needed for incorporating a Public Limited Company in India.
Any person who is of at least 18 years of age can become a Director in a Public limited company.