How to Start a Public Limited Company in India?

When we talk about a Public Limited Company, it is somehow different from a normal Private Limited Company. Public Limited Company is such form of a company whose shares are freely sold and can be offered to the general public, which is not in the case of a Private Limited Company. However, just like any other company, Public Limited Company is also registered as per the rules and regulations provided by the Companies Act, 2013.

A Public Limited Company is best suited for those business owners who are planning to set up a large IT infrastructure, manufacturing plant etc. Some of the well known Public Limited Companies are TATA Steel Limited, Reliance Communications Limited etc.

According to Section 2(71) of the Companies Act, 2013

A Public Company means a company which

• Is not a Private Company; and

Key Features of a Public Limited Company

Some of the key features of a Public Limited Company are as follows:

• Number of Directors and Members: According to Companies Act, 2013, a minimum of 3 directors are required to form a Public Limited Company and there is no upper limit on the maximum number of directors. On the other hand, a minimum of 7 members are required to form Public Limited Company without any upper limit. Members may also include the directors.
• Paid up Capital: There is no minimum amount of paid up capital required to form a Public Limited Company. Earlier, a minimum paid up capital of Rs. 5 lakh was required.
• Name of the Company: It is essential to end the name of your Public Limited company with the word “Limited” as it represents the identity of a Public Limited Company.
• Limited Liability In case of Public Limited Company, liability of each shareholder is limited to the extent of the amount invested by them. They are not personally liable for any loss or debt which is more than the amount of their investment.
• Issue of Prospectus Since Public Limited Companies are allowed to invite public to subscribe for its shares. Hence, they are required to issue a comprehensive statement in the form of a Prospectus as per Companies Act, 2013.

Advantages of Public Limited Company

Some of the advantages of Private Limited Company are:

• It protects owners from any personal liability and from other risks and losses.
• Company, if registered, is generally genuine which ultimately increases the authenticity of the business.
• An owner can take loans in the name of a company and can make investment in different companies
• The directors of a Public limited Company has limited liabilities and are not personally responsible for any default in company affairs.
• The securities of a Public Company may be listed on a Stock Exchange
• The number of members are not limited to two hundred as in the case of a Private Limited Company
• Public Limited Companies are strictly regulated by various laws and are required to publish their true financial statements annually. Hence, it ensures genuine financial position of the company to the potential investors.

Documents Required for Public Limited Company Registration

In India, Public Limited company registration is formed with valid identity proof and address proof. Such documents are needed from all the directors and the shareholders of the proposed company.

Following are the documents that are accepted by MCA for the Private Limited company registration:

• Identity and Address Proof of Directors and Shareholders
• Scanned copy of PAN Card (Passport in case of Foreign Nationals & NRIs)
• Scanned copy of Voter’s ID/Passport/Driver’s License (Any one)
• A Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill of the individual (Any one, not older than two months)

Note: For the foreign nationals, apostilled or notarized copy of the passport has to be submitted compulsorily. All documents submitted should be valid and genuine.

• Registered Office Proof
  For online company registration in India, the company must have a registered office in India. Following documents needs to be mandatorily provided while giving Registered Office details:
  • Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill in case you own property
  • Scanned copy of Notarized rental agreement
  • A Scanned copy of No-objection certificate from the property owner

Important to Note: Your registered office can be a commercial premises or it can be your residence also.

Registration Process of Public Limited Company Registration

Effective from 23^rd February 2020, the Ministry of Corporate Affairs has provided new web service SPICe+ along with other amended forms for incorporation of various companies. The new integrated form consists of two parts i.e. Part A and Part B.

Though the process of registering a Public Limited Company has now become simple, but still assistance from a professional is advised to complete the various complex forms and filing them within time. Moreover, the government portals and language are a bit on the difficult side, too.The process of registration of Public Limited Company is as follows:

Step 1: Apply for Digital Signature Certificate (DSC)
Since the process is completely online, hence all those authorized signatories/directors who needs to sign the online incorporation documents must apply for Digital Signature Certificate.

Step 2: Apply for Director Identification Number (DIN)
DIN can be applied along with the company registration application form i.e. SPICe+. However, maximum 3 Directors can obtain DIN along with SPICE+.
In case the subscriber is already holding a valid active DIN, the proof of identity and residence need not be attached.

Step 3: Apply for Name Approval through SPICe Plus Form – Part A
For the name approval step, now you need to apply it through SPICe Plus form only with the Ministry of Corporate Affairs. Please note that a minimum of 2 names at the time of incorporation are proposed.

Step 4: Submitting Final Incorporation Documents
The Part B of SPICe Plus needs to be filled up and all the required information has to be given. Apart from that Memorandum of Association (MOA) and Articles of association (AOA) of the Company in prescribed format needs to be submitted. Moreover, declaration of all the subscribers and first directors in Form INC-9 needs to be provided.
In addition to the SPICe+ form, a person can now also apply for GSTIN, EPFO, ESIC, Professional Tax etc. through a web form called AGILE-PRO (INC-35) Once you are done with all this, convert the form into pdf format and upload on the MCA website.

Step 5: Receiving Certificate of Incorporation and opening of Bank Account
After approval of incorporation documents, you will receive your Certificate of Incorporation, Company Identification Number (CIN) along with PAN and TAN of your company.
After approval of incorporation documents, you will receive your Certificate of Incorporation, Company Identification Number (CIN) along with PAN and TAN of your company.

Annual Compliances for Public Limited Company

The following are the most important compliances which needs to be taken care of by a Public Limited Company

Apart from the above compliances, there are more number of compliances which are applicable on a Listed Public Company like compliance related to Secretarial Audit Report, Listing Regulations of SEBI, 2015 etc. and other event based compliances.