- Public Companies can share their issue to the public through the stock exchanges or the stock market.
- These also can raise additional capital by issuing debentures and bonds from the public on the basis of their financial performance.
- We commonly known them as Publicly Traded Companies or Publicly Held Companies.
- These Companies Shares are freely transferable that provides more liquidity for thier shareholders.
Documents Required for Public Limited Company in India :
Self attested copy of Pan Card of all the proposeddirectors in case of Indian (minimum 3 directors and minimum 7 Shareholders)& Passport in case of foreign nationals.
Self attested copy of Address Proof (Passport/AadharCard/Voter Id/DL) of all the proposed directors and Shareholders.
Self attested copy of Bank Account Statement/Mobile Bill/Electricity Bill of all the proposed directors.
Passport size Photographs of all the proposed shareholders and directors.
Duly signed DSC Form of the all directors of the proposed company.
Copy of current Electricity Bill/House Tax/Water Bill Etc for the premises proposed to be used as Registered Office of the Company.
If the property is rented, then rent agreement and No Objection Certificate from Owner of Property.
After Public Limited Company Registration what you get:
Unique Director Identification Number (DIN) for life time
Digital Signature Certificates (DSC)
Reservation the name for your Company.
Certificate of Incorporation
Rubber Stamp of the Company
PAN Card of the Company
Proper Incorporation File
Bank account opening documents
Draft Copies of MOA & AOA.
Advantage of Limited Company Registration :
- LIMITED LIABILITY : Once shareholders have paid for their shares it woould be an important benefit of incorporation; the members of the company have no further liability to contribute towards debt incurred by the company.
- SEPARATE LEGAL ENTITY : A company is a legal entity and a juristic person established under the Act. Therefore company has a legal capacity to own property and incure debts. The members (Directors/Shareholders) of a company have no liability to the creditors of a company for such debts.
- ACCESS TO FINANCE: A Public Company can easily obtain finance from the bank and other financial institutions as these types of institutions are more willing to extend finance to this type of company than to smaller forms of business entities.
- BRAND AWARENESS: Since these types of companies are often listed on stock exchanges, people will be easily and quickly recognize the brand or name of the company.
- MORE CAPITAL: Since a public company can sell its shares to the public thus the potential capital that can be raised is larger. A sole proprietorship or ordinary business partnership cannot usually raise the same amount of capital without additional leverage.
- CAPACITY TO USE AND BE USED : The Company being legal person has full right like a natural person to institute legal proceedings against or to bring a suit in a court of law and also can be sued in its own name.
- FREELY TRANSFERABLE : Shares of these types of companies are freely transferable that provides more liquidity to its shareholders.
- CONTINUITY OF MANAGEMENT : The management of a company might be separate from its ownership. Management of the business can then continue in spite of any changes in shareholders. Employees can be promoted to senior management positions without necessarily holding any shares in the company. They can also be given shares as an incentive.
- OWNING PROPERTY : A company being a legal person, can acquire, own, enjoy and alienate property in its own name. No shareholder/director can make any claim upon the property of the company so long as the company is a going concern
- ABILITY TO TAP FINANCIAL MARKETS: The biggest advantage to these types of companies is their ability to tap the financial markets by selling stock (equity) or bonds (debt) to raise capital (cash) for expansion of business activities.
- Requirement of Minimum capital Rs. 500000 is removed by amendment under Companies Act, 2013.
10-20 days (Subject to ROC Response) after receipt of all the necessary documents, the breakup of the number of days is as follows:-
|Taking Digital Signature of Directors||1-2 Day|
|Taking Directors Identification Number (DIN)||1 Day|
|Reservation of the name of the Company||2-7 Days|
|Preparation of other documents such as MOA,AOA, Forms etc||2 Days|
|Filling of documents with Authorities||1 Day|
|Getting Final Certificate of Incorporation||3-7 Days|
|Total Number of Days||10-20 Days|
1).What is a Public Limited Company in India?
Answer: A Public Limited Company is incorporated and governed by the Indian Companies Act 2013. Public Limited Company is a purely separate legal entity distinct from its members and directors. It has the advantage of limited liability, greater stability and recognition. The basic requirement for a Public Limited company in India is to have minimum three directors and seven shareholders. These are commonly known as publicly traded companies or publicly held companies.
2).What are the benefits or advantages of a limited company registration?
Answer: A Public Limited Company has the advantage of limited liability, greater stability, recognition, separate legal entity, easily obtain finance from banks and other financial institutions, people will be easily and quickly recognize the brand or name, can sell its shares to the public, full right like a natural person to institute legal proceedings against or to bring a suit in a court of law and also can be sued in its own name, shares of companies are freely transferable, the management of a company might be separate from its ownership, can acquire, own, enjoy and alienate property in its own name and ability to tap the financial markets by selling stock (equity) or bonds (debt) to raise capital.
3).What is the procedure to incorporate a public company?
Answer: There are two ways of company Incorporation in India.
Through Normal Mode (INC-1)
Through Fast Approval Mode (INC-29)
4).What is the time frame for Company Incorporation as public company?
Answer:Through Normal Mode- It usually takes 10-15 days after receipt of all the necessary Documents, The breakup of the Number of days is as follows:-
Through Fast Approval- It usually takes 4-5 days after receipt of all the necessary documents.
5).What are the Charges for Incorporating a Public Limited Company?
Answer: Fees for the incorporation decide on company capital, state and total number of directors.
6).What is the minimum paid up capital requirement for Incorporating a Public Limited Company?
Answer: A public company must have a minimum paid up capital of Rs.5,00,000 (Five lakh).
7).How many Persons are required to incorporate a New Company Registration as Public Company?
Answer: The Minimum numbers of 7 persons (members) are required to incorporate a company (It may be noted that there is no restriction of maximum number of members in case of public company)
Legally minimum 3 directors are required and 7 shareholders are required.
These three persons can act in both capacities as directors and as shareholders.
8).Whether shares can be transferred or not in case of public company?
Answer: In case of public company there is no restriction on the transferability of the shares. Shares can be easily and quickly transferred from one person to another.
9).How a public company can go for subscription of its shares?
Answer: A public company is free to invite public for subscription of its shares by issuing a prospectus (which means any document or notice, circular, advertisement or other document inviting offers from the public for subscription or purchase of any securities of a body corporate).
10. Can a public company further issue its shares directly to general public?
Answer: No, firstly a public company has to offer the further issue of shares to its existing shareholders as right shares. Further issue of shares can only be offer to general public with the approval of existing shareholders in the meeting of shareholders only.
11. What is the validity of Certificate of Incorporation Issued by the ROC?
Answer: Once a Certificate of Incorporation is issued by the ROC, it is valid for the lifetime of the company unless it goes for winding up.
12. What are the post-incorporation requirements in case of a public limited company?
Answer:Once you get Certificate of Incorporation, Your Company Name and Details of Directors will be available on MCA Web-Site. Now a Company having share capital required to obtain a separate CERTIFICATE OF COMMENCEMENT of business.