Public limited companies enjoy all the rights of a corporate entity with limited liabilities and it is an ideal choice for the small and medium scale enterprises who wish to raise the equity capital from the general public.

Below we are going to provides full knowledge of the features, procedure and document requirement for Public Company Registration.

What is a Public Limited Company?

Just like other companies, Public Limited Company is also registered as per the rules and regulations of the Companies Act, 2013. A public Company enjoys the benefits of limited liabilities for its members and has rights to sell its shares for raising the capital of the company. It can be incorporated with a minimum number of three directors and has more stringent rules and regulations as compared to a Pvt. Ltd. Company.

It must have a minimum number of seven members whereas there is no limit for the maximum number of members. It provides all the benefits of a private limited company along with more transparency and easy transferability of ownership and shareholding. Name, shares, formation, number of members, management and directors, etc differentiates Public limited company from the private limited companies.

What is the difference between the Public limited Company and Private Limited Company?

There are various points of differences between both these companies. Here are some chief differences between both:

Features of Public Limited Company:

Here are some important features of Public Limited Company:

1. Number of Directors in the company:

As stated in the provisions of Companies Act, a public company must have a minimum number of 3 directors to incorporate a company whereas there is no restriction on the maximum number of directors.

2. Name of the Company:

All the Public limited companies must add “Limited” word at the end of their name. it is denoted as an identity of a public company.

3. Prospectus of the Company:

Prospectus of the company is mandatory for the public limited companies. It is issued by the proposed company for its general public. It is a note of comprehensive statements of works and affairs of the company. However private companies have no such compliances as they don’t have rights to invite the public for their shares.

4. Paid-up Capital:

As per the requirements of the act, the public company must have Rs 5, 00,000 paid-up capital for the registration.

Benefits of Public Company Registration:

Here are the benefits provided to the company with Public company registration;

1. Limited liabilities for the shareholders of the company:

Shareholders of the public company enjoy the benefits of limited liabilities under which their assets are safe and cannot be used to clear the debts and losses of the company. Despite of it, the shareholders are responsible for their own legal offenses. All the members, directors and shareholders enjoy this right and their assets cannot be seized by any bank, creditors or government bodies.

2. Perpetual Succession:

A public limited company is considered as a corporate body that has perpetual succession. Means in case of death, retirement, insanity, and insolvency of one or more members/ shareholder/ directors, the company still continue its existence.

3. Improved capital of the company:

In a public limited company, the general public is invited to buy the shares of the company. Hence, anyone can invest in a public company that improves the capital of the proposed company.

4. Borrowing Capacity:

A public company can enjoy unlimited sources for borrowing funds. It can issue equity, debentures and can accept the deposits from the general public by selling its shares. Moreover, most of the financial institutions find public companies more prominent than other unregistered companies.

5. Fewer risks:

Since public companies can sell their shares to the public, it lesser the scope of unsystematic risks of the market.

6. Better opportunities for growth and expansion of the company:

Fewer risks lead to better opportunities so that the company can grow and expand by investing in new projects from the funds raised by selling its shares in the market.

Step by step guide for Public Company Registration:

Public Company Registration is a simplified procedure that can be accomplished with a little bit of expert guidance. So here is the step by step guide to make your work easy and fast:

Requirements for the Public Company Registration:

According to the provisions of Companies Act, 2013 here are the requirements you need to fulfill to incorporate a Public company in India:

• The proposed company must have a minimum number of 7 shareholders
• The proposed company must have a minimum number of 3 directors 
• The company must have a minimum Rs 5 lakhs as a share capital 
• At least one director should have a Digital Signature Certificate 
• All the directors need to have a DIN 
• Memorandum of Association and Article of Association. 
• After approval from Registrar of the Companies, the proposed public company has to apply for the “Certificate of Business Commencement.” 

Documents required for Public Company Registration:

An applicant has to collect all these documents to file along with the incorporation application:

• Identity Proof such as Aadhar card, PAN card, Driving License, Voter Id of all the designated directors and shareholders. 
• Address Proof of all the proposed directors and shareholder of the company.
• PAN card details of all the directors and shareholders
• Utility bill such as telephone, gas, water or electricity bill of the registered office as a residential proof of the business place. It should not be older than 2 months. 
• An NOC or No Objection Certificate from the landlord of the business place. 
• DIN or Directors Identification Number of all the designated directors
• DSC or Digital Signature Certificate of the designated directors
• Memorandum of Association (MOA) and Article of Association (AOA)

Procedure for Public Company Registration:

• Step 1: Apply for the Digital Signature Certificate:

  First of all, you have to apply for the Digital Signature Certificate for all the proposed directors in the company. DSC is used to sign the e-forms and is an authentic and safe method to file all the documents on an electronic platform. It is a mandatory document.

  A director can easily obtain DSC from the nearest Certifying Authorities or CAs with self-attested coppices of their identity proof. It takes around 1 -3 working days to obtain a DSC.

• Step 2: Apply for DIN:

  Ministry of Corporate Affairs has simplified the DIN procedure, as an applicant can apply for it through the SPICe form and do not require filing any other form. It is mandatory for all the directors of the company to apply for their Director’s Identification Number.

• Step 3: RUN Form: Reserve Unique Name Verification:

  The third step involves name registration of the company. You can check the name availability through the MCA portal by following this step:

  Visit the MCA Portal> select the MCA services> Click Check Company Name

  Note: The company name should not be taken or registered and should not be similar to a brand name.

  Once you have checked the name can file the RUN Form for the name approval of the company. You can provide 2 names at a time and pay the fees of Rs 1000 per submission. In case the name gets rejected you can resubmit the application. As stated, the company name should end with “Limited” word.

• Step 4: Filing Form SPICe

  Once the company’s name has been approved you can now file the SPICe form to avail the company incorporation certificate. Along with it, you have to file all the required documents such as MOA (Memorandum of Association) and AOA (Article of Association). These two documents contain the details of the mission, objectives, aims, visions, business activities, responsibilities of all the directors and shareholders and definition of the proposed company.

  All the documents and applications are further verified by the higher authorities and it takes around 7 to 9 working days.

• Step 5: Obtaining Certificate of Incorporation:

  Once all the applications and document to have been received to the authorities and they have verified it, the company would receive the Certificate of Incorporation which will include CIN and date of incorporation.

• Step 6: Availing the PAN TAN of the company:

  Once you have got the Certificate of Incorporation, now you can apply for the PAN and TAN application by the MCA. It would take around 1 to 3 working days.

• Step 7: Open a Bank account:

  With the help of PAN card and Certificate of Incorporation, you can easily open a bank account at your Company’s name.

• And here you are done with the Public Company Registration.