Public Limited Company Registration

A public limited company offers shareholders the advantage of limited liability while allowing them to sell their shares to generate funds. This opens the door for any interested investor to purchase shares and become part of the company.

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Overview of Public Limited Company

A Public Limited Company provides limited liability protection to its owners and management while offering the ability to raise capital by selling shares to investors. This structure requires at least three directors for incorporation, with no upper limit on the number of members. Unlike a Private Limited Company, it operates under more stringent regulatory requirements.

Although a Public Limited Company differs in certain aspects, it shares many features with a Private Limited Company. It also enjoys additional advantages such as easier transferability of shares, higher borrowing capacity, limited liability, and perpetual existence. Like other companies in India, it is governed by the provisions of the Companies Act, 2013.

A Public Limited Company benefits its members by offering limited liability and the ability to issue shares to raise capital. It requires a minimum of three directors and seven members for incorporation, with no restriction on the maximum number of members. Compared to a Private Limited Company, it adheres to stricter regulations but provides added benefits like transparency, ease of ownership transfer, and shareholding flexibility. Key differences between a Public Limited and a Private Limited Company include the name, shareholding structure, member count, governance, and compliance requirements.

Advantages of Public Limited Company

Business Type for Investors: Public limited companies are highly preferred by investors and stakeholders due to their well-organized and transparent business structure. For entrepreneurs looking to raise capital and offer ownership in their business, this type of company is an ideal choice.
Best Option for Heavy Investment: Public limited companies provide the most suitable business structure for large-scale investments, making them the go-to choice for heavy capital requirements.
Ease of Raising Funds and Loans: Public limited companies have a distinct advantage in raising capital. They can list their shares on various stock exchanges in India, attracting investments from the stock market and individual investors. Additionally, they have access to diverse options such as minimum paid-up capital, bank loans, and institutional funding.
Perpetual Existence: A public limited company enjoys perpetual succession, meaning it continues to exist regardless of changes in membership or the departure or death of any member. It operates as a separate legal entity and remains unaffected until legally dissolved.
Simple Share Transfer Process: Exiting a public limited company is straightforward. Ownership can be transferred easily by handing over the company’s shares along with the necessary share transfer forms to the new investor or buyer.
Independent Property Ownership: As a separate legal entity, a public limited company can own, acquire, enjoy, and dispose of property in its own name. Shareholders have no claim on the company’s assets as long as it remains operational.

Checklist for Registering a Public Limited Company in India

As per the Companies Act, 2013, any public limited company seeking registration in India must comply with the following conditions:

A minimum of seven members is required to establish a public limited company.
There is no upper limit on the number of members.
At least one director must be a resident of Indian territory.
The company must have a minimum paid-up capital of ₹5 lakhs.
Shares allotted to members are freely transferable.
Public limited companies can raise funds from the general public by issuing shares, accepting fixed deposits, or seeking investments through public invitations.
The company’s name must be unique and must not resemble or match any existing company name or registered trademark.
The name of the company must include either "Public Limited" or "Private Limited" as a suffix, depending on its classification.

Documents Needed for Public Limited Company Registration in India

Documents Required for Directors and Shareholders:

PAN Card (mandatory for Indian nationals).
Proof of Nationality for foreign nationals.
Passport for foreign nationals (required as identification).
Identity Proof such as Passport, Driving License, Voter ID, etc.
Address Proof for directors and shareholders.
Two Passport-Size Photographs.

Additional Address Proof Documents:

The applicant can submit documents such as an electricity bill, telephone bill, or bank statement. These documents must not be older than two months.

Property and Ownership Documents:

Rent Agreement or property conveyance document accompanied by rent receipts.
Latest Utility Bills (e.g., electricity, water, or gas bills).
No Objection Certificate (NOC) from the property owner or landlord.

Digital Signature Certificate (DSC): A DSC is required for digital authentication during the registration process.

Special Requirements for Foreign Directors: For foreign directors, additional documentation and certifications depend on their country of residence:

Notarized Documents for directors holding nationality from a Commonwealth country.
Notarized and Apostilled Documents for directors from countries that are signatories to the Hague Convention.
Notarized and Consularized Documents for directors from countries not falling under the above categories.

Public Limited Company Registration Procedure

Applying for Name Reservation: Submit an application to reserve a unique name for the company.
Obtaining Digital Signature Certificate (DSC): Acquire a DSC for the directors to enable secure online document signing.
Getting Director Identification Number (DIN): Apply for a DIN for all proposed directors.
Securing Necessary Approvals: Obtain approvals from relevant authorities, if required.
Submitting Documents to the Registrar of Companies (ROC): Provide all necessary documents, such as identity and address proofs, to the ROC.
Drafting and Filing MoA and AoA: Prepare the Memorandum of Association (MoA), Articles of Association (AoA), and other required documents. File the e-MoA and e-AoA electronically for company registration.
Minimum Director Requirement: Ensure a minimum of seven directors are appointed for incorporation.
Applying for PAN and TAN: Submit applications for the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) along with the registration forms.
Receiving the Certificate of Incorporation: Once approved, receive the Certificate of Incorporation, marking the formal establishment of the public limited company.
Opening a Bank Account: Open a bank account in the company’s name to facilitate smooth business operations.

Frequently Asked Questions

The application for Digital Signature Certificate (DSC) for such companies is filed through the online portal, and the shareholders and directors of the company should sign it. The issuing of DSC needs some mandatory documents like address proof, identity proof associated with some photographs.
The first and foremost step in obtaining Public Limited Company Registration is to reserve and get approved the name of the company. The proposed or reserved name should not hold any word which is prohibited as per the Companies Act, 2013.
DIN is a short form of Director Identification Number, and it is issued by Registration of the Companies ROC, which permits the director to work in the company.
Yes, I can. It is a very easy process, and if the new address is inside the same city, the process of changing the address can be made within hours.
Generally, it takes 8-15 working days for a company to register. Moreover, it is a legal process and fixing a timeline is not practical; Start-ups are advised to plan the registration process in advance before the launch date of their company.
A public limited company needs a minimum capital of Rs. 5, 00,000. The director or shareholder must deposit this amount in the bank account of the public Limited Company in the determined share percentage. Then, the company can utilize the same deposit amount for its further operations.
The registration of the Public Limited Company is valid throughout the life of the company.
MOA is a short form of Memorandum of Association and it defines the business object, mission and vision of the company before its incorporation while AOA is a short form of Article of Association. It represents the internal constitution of the company.