How to Start Public Limited Company Registration
Public Limited Company Registration
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Registering a Public Limited Company helps in easier fund borrowing. To set it up, you need at least 7 shareholders, and 3 directors. This type of company offers greater transparency, better accountability, and easier transfer of shares among shareholders.
Package Inclusion : -
- Company name reservation
- DIN and DSC
- MOA and AOA
- Incorporation certificate
- PAN/TAN/ GST
- Share certificate
Public Limited Company- Overview
A Public Limited Company is a business structure that allows for the collection of funds from the public through shares, making it ideal for large-scale operations. It provides benefits like better access to capital, improved credibility, and limited liability for its shareholders.
To register a Public Limited Company in India, you need:
- Shareholders: At least 7
- Directors: At least 3
This type of company ensures greater transparency, accountability, and ease of transferring shares, making it a popular choice for businesses aiming to grow and attract investors.
Advantages of Public Limited Company Registration
Access to Capital
Public Limited Companies can raise funds from the public by issuing shares, making it easier to gather large investments for business expansion.Limited Liability
The liability of shareholders is limited to the amount unpaid on their shares, protecting personal assets from company debts.Improved Credibility
Being a registered public company enhances trust among investors, creditors, and stakeholders.Easy Share Transferability
Shareholders can easily transfer their shares, providing liquidity and flexibility in ownership.Transparency and Accountability
Public Limited Companies follow strict regulations and disclosures, ensuring transparency and fostering investor confidence.Separate Legal Entity
The company has its own legal identity, distinct from its shareholders and directors, offering greater business continuity.Potential for Growth
With access to public funding and larger resources, Public Limited Companies can scale operations and compete on a broader level.
Basic Features of Public Limited Company Registration
Minimum Requirements
- Shareholders: At least 7
- Directors: At least 3
Separate Legal Entity
The company is considered a distinct legal entity, separate from its shareholders and directors.Limited Liability
The liability of shareholders is limited to the unpaid amount on their shares.Access to Public Funding
Public Limited Companies can raise capital by issuing shares to the public through stock markets.Transparency
They are required to follow strict regulatory and disclosure norms, ensuring transparency in operations.Perpetual Existence
The company continues to exist even if shareholders or directors change or leave.Transferability of Shares
Shares can be freely transferred between individuals, providing liquidity and flexibility.Mandatory Compliance
Public Limited Companies must adhere to rules under the Companies Act, 2013, including regular audits and financial disclosures.
Procedure for Public Limited Company Registration
Registering a Public Limited Company involves the following steps:
1. Obtain Digital Signature Certificate (DSC)
- Directors and shareholders must have a DSC for filing online forms.
- Apply for DSC from a government-approved agency.
2. Apply for Director Identification Number (DIN)
- Every proposed director needs a unique DIN.
- File the DIN application using Form DIR-3.
3. Name Approval
- Choose a unique name for the company.
- Submit the name for approval through the RUN (Reserve Unique Name) service on the MCA portal.
4. Draft Memorandum and Articles of Association (MOA & AOA)
- MOA: Defines the company’s objectives and scope.
- AOA: Contains rules and regulations for managing the company.
5. File Incorporation Application
- Submit the SPICe+ (Simplified Proforma for Incorporating a Company Electronically) form on the MCA portal.
- Attach necessary documents, including:
- Identity and address proof of directors and shareholders
- Registered office address proof
- MOA and AOA
6. Payment of Stamp Duty and Fees
- Pay the applicable fees and stamp duty during the filing process.
7. Certificate of Incorporation (COI)
- Once the application is verified, the Registrar of Companies (ROC) issues the Certificate of Incorporation.
- The COI includes the Corporate Identity Number (CIN), confirming the company’s legal existence.
8. Apply for PAN and TAN
- Simultaneously apply for the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) through the SPICe+ form.
9. Open a Bank Account
- Use the Certificate of Incorporation, PAN, and other documents to open the company’s current bank account.
The company is now ready to start operations and comply with post-registration requirements like GST registration, audits, and annual filings.
Difference Between Public Limited Company and Private Limited Company
| Aspect | Public Limited Company | Private Limited Company |
|---|---|---|
| Ownership | Owned by shareholders; shares can be traded publicly. | Owned privately by a limited number of shareholders. |
| Minimum Members | Requires at least 7 shareholders. | Requires at least 2 shareholders. |
| Maximum Members | No limit on the number of shareholders. | Limited to 200 shareholders. |
| Minimum Directors | Requires at least 3 directors. | Requires at least 2 directors. |
| Capital Raising | Can raise funds from the public by issuing shares or debentures. | Cannot raise funds from the public; relies on private funding. |
| Share Transfer | Shares are freely transferable. | Shares cannot be freely transferred without shareholder approval. |
| Regulations | More stringent rules and regulations under the Companies Act, 2013. | Fewer compliance requirements compared to a Public Limited Company. |
| Transparency | High transparency due to disclosure and audit requirements. | Lower transparency; fewer public disclosures required. |
| Stock Exchange Listing | Can be listed on a stock exchange. | Cannot be listed on a stock exchange. |
| Purpose | Suitable for large-scale operations and fund raising. | Ideal for small to medium-sized businesses with limited scope. |
| Liability | Liability of shareholders is limited to their share capital. | Liability of shareholders is also limited to their share capital. |
Both structures offer limited liability, but the choice depends on the scale, ownership preference, and funding requirements of the business.
Frequently Asked Questions
A Public Limited Company can raise funds from the public by issuing shares and is subject to stricter regulations, while a Private Limited Company raises funds privately and has fewer compliance requirements.
Yes, a Private Limited Company can convert to a Public Limited Company by meeting the requirements under the Companies Act, 2013.
Public Limited Company: Requires at least 7 shareholders, with no upper limit.
Private Limited Company: Requires at least 2 shareholders, with a maximum of 200.
- Public Limited Company: Shares are freely transferable.
- Private Limited Company: Share transfers are restricted and require approval from other shareholders.
- Public Limited Company: Requires a minimum of 3 directors.
- Private Limited Company: Requires a minimum of 2 directors.
- A Private Limited Company is ideal for small to medium-sized businesses due to simpler compliance and limited shareholder requirements.
Yes, both require paid-up capital:
- Public Limited Company: No specific minimum capital (as per recent amendments).
- Private Limited Company: No specific minimum capital (as per recent amendments).
Yes, a Public Limited Company can list its shares on a stock exchange to raise capital from the public.
A Public Limited Company must adhere to stricter disclosure, audit, and regulatory requirements, ensuring higher transparency.
In both Public and Private Limited Companies, the liability of shareholders is limited to the unpaid amount on their shares.
A Public Limited Company is more attractive to investors due to its ability to raise funds publicly and its listing on stock exchanges.
Yes, a Private Limited Company can continue to operate without conversion as long as it meets its business needs and shareholder limits