How to Open a Public limited Company in India

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How to Open a Public limited Company in India

A Public Limited Company in India is a business entity that is allowed to offer its shares to the public and has limited liability protection. It is one of the most popular types of company. As per Indian law, all the PLCs must register with the Registrar of Companies and comply with the regulations of the Companies Act, 2013. Want to open a public ltd company of your own? Connect with Registrationwala for private company registration!

About PLCs

PLC full form is public limited company. This kind of company offers shares to the general public through stock exchanges and comes with limited liability for shareholders. Many companies that aren’t initially PLCs, transform into PLCs in future. A PLC’s stock can be acquired by anyone, either privately through Initial Public Offering (IPO) or by trades on the stock market. PLCs are strictly regulated and are required to publish their true financial health to their shareholders

All the public limited companies in India are governed by the provisions of the Companies Act 2013 and are required to file their annual returns with the Registrar of Companies (ROC).

Benefits of Opening a Public Ltd Co

Opening a public limited company comes with a wide range of benefits including the following:

• If not the biggest, then definitely one of the biggest advantages of a public limited company is that it is authorized to raise capital through issuance of its shares to the general public. As compared to private companies, public companies can raise a considerable amount of capital. 

• PLCs can also benefit from mutual funds, hedge funds, etc.

• There’s no maximum limit for the number of shareholders in a PLC. Hence, a public company can have as many shareholders as it wants. This advantage gives it an edge over other types of companies which have a maximum limit for the number of shareholders it can have.

• Businesses that typically choose a Public Limited Company as their legal entity operate on a large scale and, as a result, have great development and expansion potential. This makes it simple for a PLC to raise money through a variety of different methods, including crowdfunding, bonds, debentures, and credit from banks and financial institutions, in addition to equity or share capital. 

• Since a public limited company is listed on stock exchanges, details about it can be searched easily. This makes a PLC credible and trustworthy. Due to this, obtaining a loan can be easier.

• As compared to a private company, transfer of shares is easier for public ltd co. A Private Limited Company offers the shares to be transferred to current shareholders for purchase first, and only then, if they decline, does the option to transfer them to another investor is taken into consideration. A Public Limited Company does not have to adhere to any such restrictions when transferring its shares. 

• If a public limited company incurs debts or losses in its name, then the shareholders are not liable to pay them as long as they haven’t provided personal guarantees. This makes PLCs a better choice than sole proprietorship wherein the owner has unlimited liability for losses and debts.

Prerequisites to Form a Public Limited Company

There are some prerequisites to form a public limited company. Let’s take a look at them one by one.

Eligibility Criteria for Directors and Shareholders

Let’s check out the eligibility criteria for directors and shareholders in PLC:

Director eligibility: 

• Be at least 18 years of age 

• Be able to enter into a contract for directorship 

• Have not been disqualified by any provisions under the Companies Act 2013 

• Have a valid Director's Identification Number (DIN) 

• Have mutual consent from the Board of Directors and shareholders.

Shareholder eligibility: 

• A minimum of seven shareholders are required for PLC registration. 

Authorized Capital Requirements

The minimum authorized share capital for a Public Limited Company (PLC) in India is Rs. 1 lakh.

Necessary Documents for PLC Incorporation

Here are the necessary documents for public limited company incorporation:

• Articles of Association (AOA) & Memorandum of Association (MOA);

• Identity proof of all the Directors & Shareholders of the Company;

• Address proof of all the Directors & Shareholders of the Company;

• DIN and DSC of all the Directors;

• No Objection Certificate from the landlord of company address;

• Latest utility bill of the company’s registered office.

Steps to Register a Public Limited Company

Here are the steps involved in public limited company registration process:

Apply for Digital Signature Certificate (DSC)

Getting a digital signature certificate (DSC) as a director or shareholder is one of the most crucial steps in the public limited company registration process. The controller of certification agencies issues DSCs in India. Documents like passport-sized photographs, PAN, aadhaar card, phone number, and email address are required in order to receive this certificate. The director or shareholder should additionally provide notarized and apostilled documents if they are a foreign national.

Obtain Director Identification Number (DIN)

To serve as a director of a corporation in India, a person must possess a DIN. Hence, each director of the company has a unique DIN number. The DIR-3 form must be filed for obtaining DIN. This form must be uploaded on the MCA portal along with documents for identity proof, address proof and director's photographs.

Registration on the MCA Portal

In order to apply for company registration, SPICe+ form must be filled completely and then submitted on the MCA website. For filling this form and submitting the required documents, the company director requires MCA registration on the portal. Once registered, the director can access portal services which includes filing e-forms as well as checking the public documents.

Allotment of Certificate of Incorporation and PAN/TAN

The time for processing an application of company incorporation can take a few weeks. Once the application has received the approval of the Registrar of Companies, the company will finally be incorporated. Also, the company will be granted an incorporation certificate, containing date of incorporation and CIN. After a certificate of incorporation has been obtained by the public limited company, it must also apply for a certificate for commencement of business to start operations. 

Additionally, PAN and TAN must also be obtained by the company for tax purposes. To apply for them online, the MCA portal must be visited and an AGILE-PRO form must be filed on it. 

Choosing Registrationwala for PLC Registration

Registrationwala has helped thousands of entrepreneurs to get their companies registered in India as well as abroad. Each type of company has different legal and regulatory requirements. We understand them, and help our clients to fulfill these requirements.

For registration of a public limited company, we help our clients to file all the mandatory documents, including application form for company incorporation. Even after their company has been registered successfully, we continue to provide them assistance to ensure their compliance with ROC requirements. Get in touch with us as soon as possible, so we can help you to start a public limited company in the shortest time possible.

People Also Read: Why LLPs May Be the Perfect Fit for Your Business

Conclusion

Public limited companies are a popular business structure around the world. Many entrepreneurs choose to get PLCs registered due to limited liability protection for shareholders and for being able to offer company shares to the public to raise funds. Want to register a public ltd company easily? Get in touch with our company registration experts at Registrationwala!

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