What is Public Limited Company Registration in India?
A Public limited company registration is the biggest form of business available in India. It is a large form business with the separate legal entity and brand recognition. The company is formed by raising fund from the public through Initial Public Offering. There is no maximum number of members required however after reaching 500 members, SEBI approval is required.
Furthermore, Public company registration requires only 7 persons to incorporate with no minimum capital. However, if you are thinking to register a Nidhi company which is also a public company then the minimum capital of Rs 5 Lakh is required.
So, now coming to the main topic of the article which is a Public Company registration is as discussed-
Incorporation of Public Limited Company Registration under Companies Act, 2013
According to Section 2(71) of the companies ct-
A “public company” means a company who—
(A) Is not a private company;
(B) has a minimum paid-up share capital of five lakh rupees or such higher paid-up capital, as the case may be prescribed
Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be a public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles.
How to Register a Public Limited Company in India?
Following are the steps you need to follow for Public Company registration in India
- Apply for DSC and DIN – Digital Signature Certificate is an electronic signature which will be used for filing government forms online. After that, you also need to apply for Director Identification number (DIN) which you can file using SPICe form.
- Company Name Approval – after obtaining DSC and DIN. An application for name approval in RUN form will be submitted at MCA portal Online.
- File for Incorporation - the most important step is to file the incorporation via SPICe form (INC-32) to get the MCA registration. All the documents like Memorandum of Association, Article of Association, Permanent Account Number or Tax Deduction and Collection Number are created and submitted with the form.
- Company Registered- when all documents are found to be genuine then ROC will issue the Certificate of Registration to the company.
- GST Registration – after getting the incorporation of the certificate, you need to get the GST Registration.
It takes around 7 to 10 days to complete the Public Limited Company Registration procedure subject to getting all the approvals from the MCA.
Documents required Public Limited Company Registration
The Following documents are required for the Public Limited Company Registration
- A copy of Memorandum of Association (MoA) and Articles of Association (AoA);
- Affidavit and declaration by the first subscriber(s) and director(s);
- Proof of registered office address
- If self-owned property, then conveyance/lease deed
- If rented premise, then rent agreement with receipts and NOC from the owner;
- Copy of utility bills, not being more than two months old;
- Identity proof (like Aadhar/ Passport / DL/ any other government-issued ID, Utility bills as address proof for all proposed directors. Must provide a copy of PAN Card (in case of Indian Nationals) and Passport (in case of foreign nationals);
- Trademark registration certificate/approval from the owner of the trademark.
Upon submission of all the documents and information required for the registration of the Public Limited Company Registration, the ROC shall issue a Certificate of incorporation and a CIN i.e. Company Incorporation Number.
Public Limited Company Registration Fees
Well, the cost of registering Public Limited Company depends on the company from where you are getting your registration. The Public Registratio0n fee varies from company to company.
Minimum Requirement for Public Company Registration
- Minimum 7 persons- for public company registration, minimum 7 persons are required to incorporate the company. The person appointed could be shareholder or director of India.
- No minimum capital- you can start your public company with only Rs 5000 capital, however, for a Nidhi company minimum 5lakh capital is required to commence it.
- Unique Name- this is the most essential requirement of the public company registration, a unique name is required to get the company registration.
- One Resident Director- to incorporate a public company, you need to appoint a minimum 7 directors in which one director should be resident of India.
Eligibility Criteria for Public Limited Company Registration
- Student- a student above the age of 18 can form any type of the company in India, whether private or public.
- Employee- the employee of the company can only hold the shares of the company but cannot take the position of the director at any time.
- No Criminal background- the person with any criminal background is not eligible to start a public company. They need to submit various declarations to the ROC.
Advantages of Public Limited Company Registration in India
So, the advantages of Public Limited Company registration in India are as follows
The first and foremost advantage of the company registration is the limited liability that is conferred upon the company’s director and shareholders.
Brand Recognition to the company
After the registration, the company has its own legal entity or status or recognition in the market. It has its separate existence in the eyes of law from its director or shareholder. The customer put more trust in the registered company.
It is a say people come and go or what we will call director may come and come but in case of a public limited company, it has its own entity and perpetual succession which means the existence in the eyes of Law Company remains forever. The death, disability or retirement of any person would not affect the existence of the company.
When comes a time to sell the business as a going concern the advantages is the level of easiness in transferring the shares of entire shareholding to the purchaser and thus facilitates easy change in the management and the ownership.
Borrowing loan from bank or Institution
It is easy to borrow a loan from a bank or financial institute when you are a registered company as that creates a level of trust.
Raising Money from Public
The Registered Company can raise a large amount of capital from the general public by issue of shares and public deposits.
How to raise fund in a Public Limited Company?
In every business, Finance is a lifeline of it. The availability of good finance is required in order to sustain in the flexible environment. The following are the seeds of raising funds for the company
- Business Plan- gone are those days when you can get the fund by just sharing the ideas. Now, the time asks for something solid, like the idea should be engraved in the paper.
- List on the stock exchange – get your company listed on the stock exchange, this will help you get the funds easy to raise.
- Prepare Documents – prepare documents like shareholder agreement, share purchase agreement etc.
Compliances under Public Company Registration
The following are the compliances under Public Company Registration
- Board Meeting- every public company needs to call minimum 4 board meeting in a year as after the registration as per the companies act, 2013.
- Statutory Filing- a company needs to prepare various statutory registers and to file forms like MGT-14, AOC-4 on a timely basis.
- Annual Returns- one of the most important compliance that every company needs to follow is the annual return or annual filing.
- Income tax Return- as you have started the business, it is supposed that you have started the income and whenever there is an income there is a tax. So, after the registration you have to pay the tax on income and file ITR or Income Tax Return.
- GST Return Filing – the other compliance is the GST return filing which should be filed every month twice.
- TDS Return filing – if you are into the trade or profession or business and deducted tax as in TDS form the income tax payment then you has to file the TDS Return.
The penalty under Public Company Registration
The Penalty for the non- compliance of any of the above condition will be over of Rs 1 lakh per annum from 2018. Furthermore, the director of the company is also being disqualified for a period of actively 5 years.