{"id":51727,"date":"2023-01-12T16:20:02","date_gmt":"2023-01-12T10:50:02","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=51727"},"modified":"2024-12-31T17:50:16","modified_gmt":"2024-12-31T12:20:16","slug":"what-is-the-purpose-of-public-limited-companies","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/what-is-the-purpose-of-public-limited-companies\/","title":{"rendered":"What is the Purpose of Public Limited Companies?"},"content":{"rendered":"\n<p>A company is defined under <em>Section 2(2<\/em>0) of the Company Act of 2013,\nas &#8220;A company formed in accordance with this Act or any previous act.&#8221;\nUnder the Act, there are several forms of the company, but one should select\ntheir business model based on the particular nature, appropriate laws and\nregulations, etc. As per <em>Section 2(71)<\/em> of\nCompanies Act, 2013, \u201c<em>A public company\nmeans a company which is not a private company<\/em>\u201d Public company may be incorporated\nfor any lawful purpose by seven or more persons. Public limited companies are essentially corporate entities\nthat are registered under the Indian Companies Act. They have their own legal\nidentity and are regarded independent from their owners. A PLC&#8217;s stock or\nbusiness share may be purchased or claimed by anybody, either privately during\nthe initial public offering procedure or through exchanges on the stock\nexchange market. While these businesses are still owned and managed by their\nowners, they operate under their own set of rules, duties, laws, and legal\nrights.<\/p>\n\n\n\n<p>The shareholders or &#8216;stakeholders&#8217; of public limited companies\nare the firm&#8217;s owners. The entity&#8217;s ownership stake is divided into various\npieces known as &#8216;shares&#8217; or &#8216;equity shares. Examples of the Public Limited companies in India. <\/p>\n\n\n\n<p>Some of the examples of Public Limited companies (PLCs) in India are as follows:<\/p>\n\n\n\n<ul>\n<li>Bharat Heavy Electricals Ltd., popularly\nknown as BHEL<\/li>\n\n\n\n<li>Bharat Petroleum Corporation Ltd also known\nas BPCL<\/li>\n\n\n\n<li>Coal India Ltd. <\/li>\n\n\n\n<li>Hindustan Petroleum Corporation Limited, popularly known\nas HP <\/li>\n\n\n\n<li>Indian Oil Corporation Ltd. <\/li>\n\n\n\n<li>National Thermal Power\nCorporation Ltd., popularly known as NTPC <\/li>\n\n\n\n<li>Oil and Natural gas Corporation Ltd.,\npopularly known as ONGC <\/li>\n\n\n\n<li>Punjab National Bank, popularly known as PNB<\/li>\n\n\n\n<li>State Bank of India, popularly known as SBI<\/li>\n\n\n\n<li>Steel Authority of India Ltd., popularly\nknown as SAIL<\/li>\n<\/ul>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/what-is-the-purpose-of-public-limited-companies\/#Features_of_Public_Limited_Companies\" >Features of Public Limited Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/what-is-the-purpose-of-public-limited-companies\/#Eligibility_criteria_of_a_Public_Limited_Company\" >Eligibility criteria of a Public Limited Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/what-is-the-purpose-of-public-limited-companies\/#What_are_the_documents_required_for_the_incorporation_of_Public_Limited_Company\" >What are the documents required for the incorporation of\nPublic Limited Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/what-is-the-purpose-of-public-limited-companies\/#Points_to_keep_in_mind_after_incorporation\" >Points to keep in mind after incorporation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/what-is-the-purpose-of-public-limited-companies\/#Compliance_for_Public_Limited_Companies\" >Compliance for Public Limited Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/what-is-the-purpose-of-public-limited-companies\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Features_of_Public_Limited_Companies\"><\/span>Features of Public Limited Companies<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A company that has been incorporated as Public Limited\nCompanies has the following features:<\/p>\n\n\n\n<ul>\n<li>The Limited Liability<\/li>\n<\/ul>\n\n\n\n<p>In the event that the company suffers losses, the\nshareholders are not personally accountable. For instance, if a share has a\nface value of 100 rupees and a member has already paid 70 rupees per share, he\nmay only be required to pay up to 30 rupees per share for the lifetime of the\ncompany. In the event of the company&#8217;s dissolution, a member&#8217;s liability is\nonly limited to the amount they may agree to contribute to the assets of the\ncompany.<\/p>\n\n\n\n<ul>\n<li>Directors<\/li>\n<\/ul>\n\n\n\n<p>A <strong><a class=\"text-primary\" href=\"https:\/\/corpbiz.io\/public-limited-company-registration\">Public Limited company<\/a><\/strong> in India must have a\nminimum of 3 directors in accordance with Section 149 of the Companies Act,\n2013, which applies to public companies. Additionally, a business may have up to\n15 directors. But a firm may nominate more than the allowed number of people\nwith a special resolution.<\/p>\n\n\n\n<ul>\n<li>Paid up capital<\/li>\n<\/ul>\n\n\n\n<p>All the public limited companies in India must have a minimum\npaid-up capital of INR Five 5 Lakhs or any such a higher amount as prescribed under\nthe Companies Act of 2013. Further, there are no such rules\/laws regarding the\nmaximum capital amount. <\/p>\n\n\n\n<p>Name<\/p>\n\n\n\n<p>According\nto the provisions of the Companies Act of 2013, all the business models who\nwish to incorporate as Public Limited Companies in India must add Ltd after\ntheir name. For example: ABX Ltd.<\/p>\n\n\n\n<ul>\n<li>Prospectus<\/li>\n<\/ul>\n\n\n\n<p>As per Section 2(70) of <strong>the Companies Act 2013<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/Ministry\/pdf\/CompaniesAct2013.pdf\"><strong>[1]<\/strong><\/a><\/sup>, a prospectus means any\ndocuments including red-herring and shelf prospectus or any notices, circular, advertisement,\nor other documents that are issued by the company for inviting offer from the\npublic for the subscription of shares or debentures.<\/p>\n\n\n\n<ul>\n<li>Easy Transferability:<\/li>\n<\/ul>\n\n\n\n<p>It claims that there are no restrictions on a shareholder&#8217;s\nability to transfer their shares to the general public. This is a legal right.\nA clause in the articles cannot restrict this right. These articles, however,\nalso have the authority to impose legitimate and reasonable restrictions on\nmembers&#8217; rights to transfer their shares in a way that prescribes the method in\nwhich shares will be transferred. The shareholder may submit an application to\nthe Central Government to increase the effectiveness of this entitlement in the\nevent that the firm refuses to register the transfer.<\/p>\n\n\n\n<ul>\n<li>Raise more capital:<\/li>\n<\/ul>\n\n\n\n<p>The ultimate purpose of any company is to increase their\nwealth. In a similar manner, public limited companies offer their shares to the\ngeneral public, increasing the company&#8217;s capital.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_criteria_of_a_Public_Limited_Company\"><\/span>Eligibility criteria of a Public Limited Company <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Here are all the legal requirements of a Public Limited\nCompany in India. <\/p>\n\n\n\n<ul>\n<li>First and foremost is all the business looking to\nregister themselves as a Public Limited Company must appoint the following\npersons before going for the process of registration;<\/li>\n\n\n\n<li>The company must appoint a minimum of 2 directors and\nmaximum 15 directors;<\/li>\n\n\n\n<li>From all the directors at least 1 should be the\nresident of Indian;&nbsp; <\/li>\n\n\n\n<li>A company is required to have at least two shareholders;<\/li>\n\n\n\n<li>A company must have the minimum share capital of INR 5\nLakhs. <\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_documents_required_for_the_incorporation_of_Public_Limited_Company\"><\/span>What are the documents required for the incorporation of\nPublic Limited Company? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following documents are required for registering a Public\nLimited Company in India:<\/p>\n\n\n\n<ul>\n<li>Address and Identity proof of the shareholders and\ndirectors of the company<\/li>\n\n\n\n<li>A copy of PAN card of all the members which includes\nshareholders and director of the company<\/li>\n\n\n\n<li>A copy of utility bills of the registered office of the\nbusiness<\/li>\n\n\n\n<li>A no objection certificate (NOC) (in case the premises\nis rented) which needs to be duly signed by the owner of the premises where\ncompany has its registered office. <\/li>\n\n\n\n<li>Details of <a href=\"https:\/\/corpbiz.io\/din-under-mca\" title=\"Director Identification Number\">DIN<\/a> and <a href=\"https:\/\/corpbiz.io\/dsc-registration\" title=\"Digital Signature Certificate Registration\">DSC<\/a> of all the directors of the company<\/li>\n\n\n\n<li>Certified copy of MOA (Memorandum of Association)<\/li>\n\n\n\n<li>Certified copy of AOA (Articles of association)<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Points_to_keep_in_mind_after_incorporation\"><\/span>Points to keep in mind after incorporation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>The Section 7(4) of the Companies act, says that the\nmembers of the company to maintain and preserve all the documents and the\ninformation filed for the incorporation at the office. <\/li>\n\n\n\n<li>Section 173 of the Companies Act says that the 1st board\n     meeting should be held within a time period of 30 days from the date of registering the\n     company. Also the same has to be notified to all the members by giving\n     notice not less than 7 days before such meeting.<\/li>\n\n\n\n<li>The rule 5 of the Companies (Share Capital and\nDebentures) Rules says that a Public Limited Company can issue shares to its\nsubscribers and deliver the share certificates (as per <em>Section 56(4)(a)<\/em> of the Companies Act) to the subscribers within a\nperiod of two months from the date of incorporation of the company. <\/li>\n\n\n\n<li>All the Public Limited Companies are required to open a\nbank account in the Company&#8217;s name and check whether subscription money has\nbeen received or not. <\/li>\n\n\n\n<li>A Public Limited Company is required to pay the stamp\nduty on all the shares issued by them in accordance with the Indian Stamp Act\nof <\/li>\n\n\n\n<li>According to Section 118 of the Companies Act, all\nPublic Limited Companies are required to keep a record of minutes within a\nperiod of 30 days from the conclusion of such meeting. <\/li>\n\n\n\n<li>As per Section 139(6) of the Companies Act, all Public\nLimited Companies are required to appoint the 1st auditor of the company in the\nboard meeting within a period of 30 days from the date of incorporation.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Compliance_for_Public_Limited_Companies\"><\/span>Compliance for Public Limited Companies<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  <strong>Name of E-Form\/Return<\/strong>\n  <\/td><td>\n  <strong>Purpose of\n  E-Form\/Return<\/strong>\n  <\/td><td>\n  <strong>Related\n  Section <\/strong>\n  <\/td><td>\n  <strong>Due Date <\/strong>\n  <\/td><\/tr><tr><td>\n  DIR-8<strong><\/strong>\n  <\/td><td>\n  Intimation by Director about disqualification<strong><\/strong>\n  <\/td><td>\n  Section 164(2) of the Companies Act of 2013 read with Rule 14(1) of\n  the Companies (Appointment &amp; Qualification of Directors) Rule of 2014<strong><\/strong>\n  <\/td><td>\n  Once in a Financial Year<strong><\/strong>\n  <\/td><\/tr><tr><td>\n  MBP-1\n  <\/td><td>\n  Disclosure of Interest by Directors\n  <\/td><td>\n  Section 184 of the Companies Act of 2013 read with Rule 9 of the\n  Companies (Meetings of Board &amp; its Powers) Rule of 2014\n  <\/td><td>\n  Once in a every financial year; or upon every change in the interest\n  of Directors\n  <\/td><\/tr><tr><td>\n  E-form DIR-3 KYC\n  &nbsp;\n  <\/td><td>\n  Annual&nbsp;Director\u2019s KYC\n  <\/td><td>\n  Section 153 of the Companies Act, 2013 read with Rule 12A of the\n  Companies (Appointment &amp; Qualification of Directors) Rules of 2014\n  <\/td><td>\n  Half yearly\n  <\/td><\/tr><tr><td>\n  E-form PAS-6\n  <\/td><td>\n  Reconciliation of Securities Capital Audit Report\n  <\/td><td>\n  Section 42 of The Companies Act of 2013 read with Rule 9A of Companies\n  (Prospectus &amp; Allotment of Securities) Rules of 2014 \n  <\/td><td>\n  Half yearly\n  <\/td><\/tr><tr><td>\n  E-form MSME-1 &nbsp;\n  <\/td><td>\n  Half yearly MSME Return\n  <\/td><td>\n  Companies (providing Information about payment to micro &amp; small\n  enterprise suppliers) Orders of 2019 &nbsp;\n  <\/td><td>\n  Half yearly MSME Return &nbsp;\n  <\/td><\/tr><tr><td>\n  FLA\n  <\/td><td>\n  FLA Return\n  &nbsp;\n  <\/td><td>\n  Annual return of deposits or the outstanding loans other than deposits\n  <\/td><td>\n  Annually\n  <\/td><\/tr><tr><td>\n  ADT-1\n  <\/td><td>\n  Auditor appointment\n  <\/td><td>\n  A company uses Form ADT-1 to intimate the ROC about the auditor\u2019s\n  appointment in the board meeting.\n  <\/td><td>\n  Upon fresh appointment\n  <\/td><\/tr><tr><td>\n  Form No. MGT-15\n  <\/td><td>\n  Form for filing the report on Annual General Meeting (AGM)\n  <\/td><td>\n  Section 121(1) of the Companies Act of 2013 and Rule 31(2) of\n  Companies (Management &amp; Administration) Rules of 2014\n  <\/td><td>\n  Annually\n  <\/td><\/tr><tr><td>\n  E-form AOC-4 (CFS) (XBRL)\n  <\/td><td>\n  Annual Filing for audited financial statements of the company along\n  with the report of the director and auditor of the company\n  <\/td><td>\n  Section 129, Section 134 and Section 137 of The Companies Act of 2013,\n  read with the Companies (Accounts) Rules of 2014\n  <\/td><td>\n  Annually\n  <\/td><\/tr><tr><td>\n  E-form MGT-7\n  &nbsp;\n  <\/td><td>\n  Filing of Annual Return\n  <\/td><td>\n  Section 92 of The Companies Act of 2013, read with Rule 11 of The\n  Companies (Management &amp; Administration) Rules of 2014\n  <\/td><td>\n  Annually\n  <\/td><\/tr><tr><td>\n  E-form CRA-4 (XBRL)\n  <\/td><td>\n  Filing of Cost Audited Reports of the company\n  <\/td><td>\n  Section 148 of The Companies Act, 2013 read with Rule 6(6) of the\n  Companies (Cost Records &amp; Audit) Rules of 2014\n  <\/td><td>\n  Annually (If applicable)\n  <\/td><\/tr><tr><td>\n  E-form BEN-1\n  <\/td><td>\n  File declaration by the Significant Beneficial Owner (SBO) \n  <\/td><td>\n  Section 90 of the Companies Act, 2013 read with the Companies (SBOs)\n  Rules, 2018\n  <\/td><td>\n  Within 30 days of acquiring the vital Beneficial ownership\n  <\/td><\/tr><tr><td>\n  E-form BEN-2 &nbsp;\n  <\/td><td>\n  Return filed to the Registrar in respect of declaration by the\n  significant beneficial owner\n  <\/td><td>\n  Section 90 of The Companies Act of 2013, read with the Companies (SBO)\n  Rules of 2018\n  <\/td><td>\n  Within 30 days from the receipt date of the declaration in form BEN-1\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In all the commonwealth countries, PLC (Public Limited\nCompany) is a prevalent type of business structure. A tag of Ltd. is carried\nwith the companies to inform all the potential investors that they can purchase\na share of the company. The buyers of these shares have a limited liability,\nwhich means that they will not be held liable or responsible for any loss of\nthe business. These types of companies are the best to raise capital for the\norganisation<\/p>\n\n\n\n<p>You instantly become a shareholder of a public limited business that is listed on a stock market when you invest in it. Being a shareholder provides you a claim on the company&#8217;s earnings, which may be given to all shareholders on a regular basis in the form of dividends. Furthermore, when the firm is eventually liquidated, you will be entitled to a residual claim on the net assets after the corporation has deducted all of its existing liabilities.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read Our Article<\/b>: <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/online-public-limited-company-registration-process-in-india\/\">Public Limited Company Registration Process In India<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A company is defined under Section 2(20) of the Company Act of 2013, as &#8220;A company formed in accordance with this Act or any previous act.&#8221; Under the Act, there are several forms of the company, but one should select their business model based on the particular nature, appropriate laws and regulations, etc. As per [&hellip;]<\/p>\n","protected":false},"author":48,"featured_media":51728,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[156],"tags":[3012],"acf":{"service_id":"2"},"authorName":"Astitva Kumar","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/12\/MicrosoftTeams-image-27.jpg","authorDescription":"Astitva Kumar is an advocate by profession and has completed her BBA. LLB from IP University. She is an avid reader, researcher, and legal writer. Her areas of interest include mediation, conflict resolution, finance, cyber laws, and taxation.","postViews":4506,"readingTime":7,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51727"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/48"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=51727"}],"version-history":[{"count":3,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51727\/revisions"}],"predecessor-version":[{"id":68097,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51727\/revisions\/68097"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/51728"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=51727"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=51727"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=51727"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}