Public Limited Company Registration, Process, Features, & Benefits

A Public Limited Company is an entity that can easily buy or sell on the public stock exchange. The public can invest in it.  It can be the best-fit choice for those who are in the IT infrastructure and manufacturing enterprises or PLC. Simply put, it is ideal to set up this company if you want to raise funds from the public in return for your company's shares. Even, a small or medium-sized company can have equity from this type of company.

Typically, the Companies Act of 2013 states that this type of company can allow laymen to buy its shares, which provide funds to the company. Generally, you need to have a minimum of seven members and three directors to incorporate this company.

Under the Company Act of 2015, you need no minimum capital to start it. Take into account that the regulations for a Public Limited Enterprise are more formal and harder than a Private Limited Company.

Features of a Public Limited Enterprise

Here are a few significant characteristics of this company:

·         Board of Directors (BOD)

As aforesaid, you need at least three directors to

 it. And, there is no upper limit for this category of the company.

·         Company Name

This company's name must have the word "Limited" as a suffix. It significantly helps in identifying this corporation.

·         The Company’s Prospectus

It is a must-have to present a company's prospectus so that the investors or stakeholders can have a clear understanding of its corporate planning. It basically consists of a summary of what the company is going to do and its financial structure.

·         Paid-Up Capital

This is also aforementioned, which states that there is no minimum amount or capital to start it with. In simpler words, the public limited company registration does not require any capital prior.  

Benefits of a Public Limited Corporation

Registering this company brings a ton of advantages along with.

·         Independent Legal Entity

It holds the ownership and whole sole control. It procures all legal documents like a PAN, approvals, contracts, bank accounts, licenses, assets, etc., and also bears obligations.

·         Various Options to Raise Funds

For seeking capital, this corporation can raise money from private investors and traditional lending institutions. It can offer stakes through equity shares, preference shares, or debentures. These are all acceptable for acquiring capital.

·         Shares are Transferrable

Its biggest benefit is the transferability of shares to other legal entities, such as individuals or organizations in India or anywhere. Being investors, the shareholders have a right to elect new directors.

·         Limited Liability

Herein, shareholders bear minimal legal responsibility for the company's actions. Even if it owes unexpected liabilities, the stockholders don't have any effect.

·         Expansion Opportunities

Since it can incur funds from the market or individuals, it's easy to think of growth and expansion.

·         Management

The entire responsibility of keeping it up and running is on the shoulders of the Board of Directors. These directors are elected by the company's investors, and the entire voting process is democratized.

How Can You Apply for Public Limited Company Registration?

It involves various steps, which are given below:

Step 1. Obtain a DSC and DIN

DSC refers to a Digital Signature Certificate, which is necessary for directors to do and submit to the certifying authority. DIN or a Director Identification Number is also necessary for directors. The MCA issues it, which requires the submission of crucial details of directors via the SPICe form.

Step 2. Unique Company Name

The next step is to see if the proposed company name is available on the MCA (Ministry of Corporate Affairs) website. There is a directory of registered names that you may check online. It is to ensure that your company's name does not match any existing trademark or service mark.

Step 3: Submit SPICe+ Form

This is an application form for seeking a Certificate of Incorporation. It follows the acceptance of the proposed name of your company. With this form, you need to enclose all necessary documents, including a Memorandum of Agreement (MOA) and Articles of Association (AOA).

Step 4: Certificate of incorporation

Once your application is verified, the authority issues the company's CIN (Corporate Identification Number) and the date of incorporation together with the certificate of incorporation. 

Step 5: Obtain PAN and TAN

Now, you as a director have to apply to the MCA for a Permanent Account Number (PAN) and a Tax Deduction Account Number (TAN). The MCA issues it in the name of the company.

Step 6: Open a New Bank Account

Finally, you need a saving account, which should be in the name of the company. You need to show up your company PAN card and the COI for it during documentation. 

Documentation Requirements

·         Document all directors’ and shareholders’ identities, such as a PAN card, voter ID, Aadhaar card, or driver’s licence

·         Address proof of all directors and shareholders

·         Water, telephone, gas, or power bill of the registered office (can’t be more than two months old)

·         A “No Objection Certificate” (NOC) from the landlord of the building to use as a Registered Office

·         All Directors’ Taxpayer Identification Numbers (DINs)

·         Directors’ Digital Signature Certificates

·         Articles of Association and Memorandum of Association