Public Limited Company Registration

Public Limited Company Registration – An Overview

Public Limited Company registration is an online process, mandatory under the Companies Act of 2013. The application can be filed on the Ministry of Corporate Affairs (MCA) website.

A Public Limited Company is a legal entity governed by the Companies Act, which enables the free transfer of shares on stock exchanges. Its ownership is held by multiple shareholders, all entitled to limited liability towards the business.

What is a Public Limited Company?

The Companies Act 2013 regulates the incorporation and operations of a public limited company. It is owned by investors who fund the business by buying shares that are listed for public trading on stock exchanges. Even the general public can acquire shares of a public limited company privately, through Initial Public Offering (IPO) or through trades on the stock market. The liability of stakeholders in a public limited company is limited.

Requirements for Registering a Public Limited Company in India

Public limited companies are known for their extra level of prestige. There are some mandatory requirements for their registration. The following are the requirements for new Public Limited Company registration in India:

• A minimum of 7 shareholders are required.
• A minimum of 3 directors is a must.
• No minimum paid-up capital is needed.
• An authorised share capital of INR 1 lakh is required.
• Self-attested identity proofs and address proofs are required.
• A Digital Signature Certificate (DSC) of one of the directors is a must.
• DIN is a must for all Directors.
• An application must be filed for the selection of a company name.
• An application including the company's primary objective is submitted.
• The object clause outlines the company's primary goals.
• An application is filed with the ROC.
• Mandatory paperwork, including MOA, AOA, duly filled Form DIR-12, Form INC 7, and Form INC -22 are also submitted.
• Payment of registration fees as stipulated by the ROC.
• Post ROC’s approval, the company must apply for a business commencement certificate.

Features of a Public Limited Company in India

A public limited company is one of the most considered forms of business structures. The features of a public limited company in India are:

• Directors – A minimum of three directors to a maximum of fifteen directors are needed to form a public limited company.
• Limited Liability – The liability of shareholders is limited to their investment in the company, unlike in sole proprietorships and partnerships. However, shareholders of a public limited company are not immune from liability for any illegal acts they commit.
• Share Capital – A public limited company does not need a minimum paid-up capital. Nonetheless, it must have a minimum authorised share capital of INR 1 lakh.
• Prospectus – Mandatory to publish a prospectus summarizing the details of the business for the public.
• Name – All such businesses are required to add the word "limited" after their (company) name.

Procedure to Register a Public Limited Company in India

In order to register a public limited company in India, the stepwise guide must be followed. The procedure to register a public limited company in India is as follows:

Step 1

All legal requirements, such as the minimum paid-up share capital, the number of shareholders, and the number of directors, must be met.

Step 2

The next step is to get DSC and DIN for company directors. Only individuals can hold the director’s position. No entity, including LLPs or financial institutions, is entitled to become a director in a public limited company. A director need not own the stock of the company.

Step 3

The company must register its official address with the Registrar of Companies (ROC). The company's authorised capital will determine the registration fees.

Step 4

ROC must approve the company's name before registration. "Limited" must be at the end of a Public Limited Company's name. The application must be submitted to the Ministry of Corporate Affairs using the RUN form. It is advisable to provide a list of preferred names in case the original preferred name is unavailable.

Step 5

Once company name is approved, obtaining Memorandum of Association (MoA) and Articles of Association (AoA) is a must.

Step 6

The paperwork must be sent to the ROC for validation.

Step 7

Once verified, the ROC proceeds to register the business and issue the Certificate of Incorporation (COI) and CIN.

Step 8

The business cannot begin operations immediately. Therefore, it must apply for a certificate of commencement within 180 days of obtaining the COI. The COI helps the company validate the subscription that each subscriber has paid.

Advantages of a Public Limited Company Registration in India

Business enthusiasts looking to initiate their startup journey can think about a public limited company as an excellent option. The advantages of a public limited company registration are:

• Limited Liability – Limited liability protection helps preserve the owners' assets. Therefore, if the company runs into financial problems, the director's assets are secured and cannot be taken by banks or government agencies.
• Separate Legal Entry – Since a public limited company is an independent legal body, its owners are not personally liable for any debts. The business is eligible to take debts and purchase assets in its own name.
• Raise Capital – A public limited company can quickly raise funds by making shares available to the general public.
• Credibility and Attention – A public limited company is more credible than other limited corporations since it is listed on the stock market.
• Free Transferability of Shares – Public limited companies can freely and readily transfer shares, in comparison to private limited companies, which can only do so with the approval of other firm members.
• Growth Prospects—Public limited companies have immense growth prospects as they have more funds at their disposal. These funds can be used to invest in various initiatives, such as expanding operations, developing new products, acquiring other businesses, or entering new markets.

Documents Required for Public Limited Company Registration

Registering a public limited company can be a smart move. However, one must know about the important documents required for the public limited company registration. Here is a checklist of documents required to register a public limited company in India:

1. Identity Proof – Passports and PAN cards of international and Indian directors.
2. Address Proof – Utility bills or rental agreements as residential address proof.
3. Director Identification Number (DIN) – DIN assigned by the Ministry of Corporate Affairs.
4. Digital Signature Certificate (DSC) – An electronic signature that guarantees the legitimacy of papers submitted online.
5. Memorandum of Association (MoA) – Official document outlining the company’s goals and range of activities.
6. Articles of Association (AoA) – A written statement of the procedures and policies guiding the company's internal management.
7. Declaration by Directors and Subscribers – A formal declaration signed by the subscribers and directors attests to the company's adherence to incorporation regulations.
8. No Objection Certificate (NOC) – NOC from the landlord if the registered office is a rented property.
9. Shareholding Pattern of the Proposed Company – An overview of how the company's stockholders have been allocated their shares.
10. Proof of Registered Office Address – Records attesting to the place where the business is registered and runs its operations.

Mandatory Compliances for a Public Limited Company

There are difference compliances that Unlisted and Listed Public Companies have to follow. These are:

Unlisted Public Limited Company

1. Board Meetings – Mandatory to hold at least four board meetings as per Section 173 of the Companies Act, 2013.
2. Auditor Appointment – As per Section 148(3) along with Rule 6(2) and Rule 6(3A) of the Companies Rules, 2014, the appointment of an auditor is mandatory. An auditor should be appointed within 30 days of the Board meeting or 180 days of the financial year, whichever is earlier. Even in case of a vacancy, it should be filled within 30 days.
3. Return of Deposits – Mandatory to file the Returns of Deposits with the ROC under whose jurisdiction the company falls. It should be done via Form DPT 3 in compliance with rule 16 of the Companies (Acceptance of Deposit) Rules, 2014.
4. CFO or CS or CEO Appointment – As per Section 203 read with Rule 8 and Rule 8A of the Companies Rules, 2014, it is mandatory to appoint the CFO or CS or CEO within 30 days of the Annual General Meeting or 6 months in case of a vacancy. Form MGT 14 or Form DIR 12 are to be filed.
5. Annual General Meeting – As per Section 96 of the Companies Act, 2013, the AGM for the declaration of the dividend must be organised.
6. CSR Committee – As per the Companies Act,2013 read with Companies Rule,2014 and Secretarial Standard, the CSR Committee is mandated to hold four meetings with a gap of not less than 120 days between each meeting. These meetings must be held for discussion and approval of the CSR activities initiated by the company.
7. Director’s Disclosure – As per Section 184(1) of the Companies Act, 2013 read with Rule 9(1) of the Companies (Meetings of Board and its Powers) Rules, 2014, directors must disclose their financial interests in the Company through Form MBP 1.

Listed Company

1. Annual General Meeting (AGM)—The AGM must be held in accordance with Section 121(1) of the Companies Act, 2013. Once the meeting is conducted, Form MGT-15 must be filed.
2. Financial Statements – Mandatory to file the Financial Statements as per Section 137 of the Companies Act, 2013, read with Rule 12(2) of the Companies (Accounts) Rule, 2014. These statements comprise balance sheets, cash flows statements, Director's statement, Director's report, Auditor's report, and the combined financial state (prepared in XRBL - Extensible business reporting system). This has to be filed via Form AOC 4.
3. Annual Returns – As per Section 92 of the Companies Act, 2013 read with Rule 11(1) of the Companies (Management and Administration) Rules,2014, Annual Returns have to be filed. These returns must disclose details about directors and shareholders. These must be filed via Form MGT 7 with the ROC under whose jurisdiction the company falls.
4. Financial and Director’s Report – The Financial and director's report is to be filed via form MGT 14, as per Section 173 of the Companies Act read with the Secretarial standard 1.
5. Income Tax (IT) Returns – Income Tax returns must be filed with the IT department through ITR 6 on or before September 30th of the (current) financial year.
6. Secretarial Audit Report – Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies Rules, 2014 mandates the company to submit a Secretarial report. This report has to be submitted only when the company's total paid-up capital equals or crosses INR 50 crores or, that annual turnover equals or exceeds INR 50 crores or if annual turnover exceeds INR 250 crores. This filing is done through Form MR 3.
7. Other compliances – Other compliances, such as rules and regulations listed by SEBI, must be followed.

Public Limited Company Registration Fees

Corpbiz is a professional team of experts that specializes in Public Limited Company registrations. Our consultants offer expert guidance to help you start your business seamlessly. Our registration fees range from INR 16,599 to 24,599.

Public Limited Company Registration Timeline

It takes about 10 to 14 working days to register a public limited company, including obtaining a DIN. However, the Ministry of Corporate Affairs has simplified the process through the form SPICe+, making it hassle-free.

Why Corpbiz?

Corpbiz is a team of professional experts with a solid experience and industry knowledge that helps you navigate seamlessly the complexities involved with the process.

• Assistance from professional consultants.
• Assistance in the documentation process.
• Timely filing of the application.
• Assistance in opening a bank account (if necessary).
• Assistance with DIN and DSC.
• Designated Support for any questions, 24/7.