Public Limited Company Registration

Get registered your Public Limited Company through GarudaMudra

Let GarudaMudra usher in an easy and 100% compliant Public Limited Company formation for you. Our professionals do not let you do anything out of the MCA framework and legal landscape from day one itself to make your business vibrant and hassle free in terms of regulations only.

We provide end-to-end assistance with:

1. Name Approval & DIN (Director Identification Number)
2. DSC & Drafting of MOA & AOA file preparation
3. Direct liaisoning with ROC & MCA Authorities
4. End to End help in Documentation & Filing
5. Advise on Capital Needs & Regulatory Compliance

What is a Public Limited Company?

Public Limited Company (PLC): A company structure in which shares are freely tradable by the public and sell through a stock exchange. This structure makes it easier to raise a lot of money from a broad pool of investors.

The requirements for a PLC differ from country to country, and there is often a minimum standard of capital and minimum number of shareholders. A PLC is generally run by a board of directors, although who these directors are will depend on government regulation and stock ownership of the company. The CEO, President or MD of a PLC is the same one if the company is small to medium-sized. They are there as guardians of shareholder interests, to add shareholder value.

Characteristics of a Public Limited Company

PLC stands for Public Limited Company and has a very good reputation, creditworthiness, fund-raising capability and governance. Some defining features include:

1. Limited Liability: The personal assets of the Shareholders are secured, and they have risks only up to the amount invested on shares.
2. Easier access to Capital:  Companies are involved in huge projects, the companies for sure raised huge funds from the public through share or other kinds something else. That enables them to fund major projects and expansions, which private companies might have a harder time doing.
3. Legal Person: The firm is a legal entity, which means it has a separate identity from its owners and can thus own property, enter into contracts and even initiate/defend court action.
4. Free Transferability of Shares: Acquiring and selling shares on the stock market is simple, providing investors with liquidity and flexibility.
5. Disclosure requirements: A PLC needs to issue annual reports and financial information, fostering transparency and investor confidence.
6. Prospectus: A PLC must publish a prospectus on its financial condition, risks and operations before issuing shares for sale to the public.
7. Minimum Membership: At least a minimum of 7 shareholders is required and there is no maximum limit, which enables widespread ownership.
8. Board of Directors: The board is responsible for the strategic decisions, and it is accountable to shareholders.
9. Limited or Ltd: The business name should have either “Limited” or “Ltd.” in the end indicating that its liability bears a limit.
10. Compliance: PLCs have to obey stringent rules and legislation that guarantee that investors are protected and hold the company to account.

Types of Public Limited Companies

The Public Limited Companies can be classified into two:

1. Listed Public Companies

     They are the shares listed on a stock exchange, commonly BSE or NSE.

     The shares can be bought and sold by anyone, on the open market or institutional investors included.

     These include multinational companies with shares listed on the stock market.

2. Unlisted Public Companies

     Their stocks are not listed on any market for buy/sell.

     They are actually still public and can sell shares, they just don’t list them.

     This may be because leadership wants a firmer grip on ownership, or because the company believes its timing to go public is not right.

     They can still raise this private placement or otherwise.

Acts and Rules Applicable to a Public Company

Public Limited Companies in India are governed by various laws designed to ensure transparency and accountability in operations as well as to provide protection to investors. 

The key frameworks include:

1. Companies Act, 2013

It is the chief law governing commercial entities throughout India. It covers:

1. Formation: Guidelines for formation – MOA & AOA, director, shareholder, name approval.
2. Share Capital & Debentures: authorizing and allotting, transferring or redemption of shares or debentures.
3. Management & Administration: board meetings, AGMs, directors’ responsibilities, appointment/removal of KMP.
4. Accounts & Audit: maintenance of accounts, auditors and audit.
5. Acceptance of deposits from the public: prudential standards.
6. Declaration and payment rules dividends
7. Annual Filings: submit taxing returns and financials to ROC.
8. Mergers & Winding Up: provisions for acquisition, merger, reorganization, going out of business.
9. Sanctions: fines for non-compliance.

2. Securities Market Regulations (For Listed PLCs)

If listed on an exchange like NSE or BSE, a PLC must follow SEBI regulations such as:

1. SEBI Act, 1992 – Specifies the powers of SEBI.
2. SEBI LODR, 2015 – Corporate governance, Disclosuresc, Independent directors, Audit committees, Timely reporting.
3. SEBI ICDR, 2018 – Applicable to IPOs, FPOs, rights issues.
4. SEBI Insider Trading Regulations 2015 – Prohibits abuse of unpublished information.
5. Takeover Regulations, 2011 -ׂThe`Ӹ Rules relating to substantial acquisitionof shares or takover.
6. Depositories Regulations, 2018 – Dematerialisation and depositories.

3.Tax Laws

All PLCs must follow:

1. Income Tax Act, 1961 – corporation tax, TDS, TCS.
2. Tax on supply of goods and services under GST Act, 2017.
3. Customs Act, 1962 for export import firms.

4. Labour & Employment Laws

PLCs as employers As employers, PLCs are subject to:

1. Provident Fund Act 1952
2. Employee’s State Insurance Act, 1948
3. Payment of Gratuity Act, 1972.
4. Minimum Wages Act, 1948 · Payment of Wages Act, 1936 11.

The Bonus Act, 1965

Industrial Disputes Act 1947

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Minimum Requirements to Set up a Public Limited Company

Requirements to Register a PLC in India The following minimum requirements must be fulfilled to register a PLC in India:

1. Shareholders – At least 7 shareholders must be on the company.
2. Directors – At least 3 directors required.
3. Paid-up Capital – Need not have a minimum paid-up capital as per the 2015 amendment.
4. No Cap on Number of Members – There is no ceiling on the amount of members that a PLC can have, so it can have mass public ownership.

Public vs Private limited company

Types of Companies in India In India, you are able to operate a two key types of company structures – Public Limited Companies (PLCs) and Private Limited Companies (Pvt Ltd). Both are regulated by the Companies Act, 2013, however, they are diverse in their ownership, compliance, access to capital and the operational flexibility.

Following is a detailed comparison and discussion on features, pros and cons and procedure to register Public Limited Company in India.

Benefits of a Public Limited Company

Selecting the best business structure is vital for long-term success. When it comes to PLC vs LTD There are many advantages of a Public Limited Company but the downside is greater compliance burdens and regulatory scrutiny.

Ease of Raising Capital: Public companies have access to infinite funds by the public who are able to buy shares. That gives them a leg up in financing major projects, expansions, acquisitions and technology upgrades.

Limited Liability for Shareholders: Shareholder’s private properties are not affected because their liability is limited to the unpaid value of shares. This insulates the investors from company liabilities or lawsuits.

1. Strong Market Reputation: Listing on the stock exchange boosts credibility of the company. A reputable PLC will receive additional investors, enhance customer confidence and develop corporate relations.
2. Free Transfer of Shares: PLC stock can be bought and sold readily in the stock market. That liquidity gives investors options and enhances the company’s ability to be an attractive investment choice.
3. Attracting Skilled Workforce: Listed companies usually grant ESOPs to their employees. These incentives draw skilled professionals to the company and keep employees who aspire to grow with the company’s success.
4. Expansion Opportunities: With the advantage of better fund raising capability and prestige, PLCs are thus capable to grow internationally, acquire smaller companies, investing in R&D for innovation.
5. Economies of Scale: Large-scale enterprise significantly decreases both production costs per item, and distribution and sales costs.

Requirements for registering Public Limited Company:

To register a Public Limited Company in India, the following conditions must be satisfied according to the Companies Act, 2013:

1. Minimum Shareholders: Minimum 7 shareholders are required. There is no upper limit.
2. Minimum Directors: There should be minimum 3 directors in the Company.
3. DIN Requirement: All directors must have a DIN.
4. DSC (Digital Signature Certificate): One of the directors must sign the documents electronically through DSC.
5. Registered Office: There should be a registered office of the company in India.
6. Unique Company Name: The proposed name must follow MCA naming guidelines and should not conflict with any existing entity.

Papers Needed for Public Limited Company Registration

The following documents must be prepared when applying for PLC registration:

1. Identity Proof of Shareholders & Directors – Aadhaar card, PAN card, Voter ID.
2. Proof of Residency – Recent bank statements, utility bills that would verify your address.
3. PAN Card Details– Of each of the Shareholders and Directors.
4. Evidence of the Work Location – Utility bill (not more than 2 months old).
5. Landlord’s Consent (NOC): The consent from the landlord is required if the office is on rent.
6. It Digital Signature Certificates (DSC): Required for all directors.
7. Memorandum & Articles of Association (MoA & AoA): The two core documents that lay down the business objects and internal rules.

A Step-by-Step Process of Registration for Public Limited Company

Formation of a PLC in India It’s a sequence of lawful steps for a PLC registration to meet the things in order to be legal.

Step 1: Applying for Digital Signature Certificates (DSC)

DSCs are pre-requisite for Directors and Subscribers for filing eForms on MCA portal.

Step 2: Application for Director Identification Number (DIN)

Every designated director shall file the SPICe+ form for applying the DIN by attaching the correct ID and address proof.

Step 3: Check to see if the name you want is available.

Visit the MCA portal to see if the name you want to use is unique and follows naming guidelines.

Step 4: File SPICe+ Form

After name approval, submit the SPICe+ form with MoA and AoA. These papers form the company’s constitution and organisation.

5) Get Certificate of Incorporation

The Certificate of Incorporation that states the date of incorporation, legal existence, and CIN is provided to the company by the ROC (Registrar of Companies).

Step 6: Apply for PAN & TAN

On incorporation the company has to enroll for both PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number.

Step 7: Open a Bank Account

Last step is to open an bank account (current account) in the name of the company – provide the incorporation document, PAN and AoA/MoA. For other [51 A] financial transactions, this account will be utilized.

Renewal & Extension of Public Limited Company Registration

Unlike some licenses, registration as a Public Limited Company does not lapse. It once introduced has a continuous succession. But annual compliances are mandatory to keep company in “active” status under the law.

Perpetual Validity of Registration

A PLC’s Articles of Association must be in accordance with its Certificate of Incorporation, and are not amended by annual returns. It is the company’s birth certificate and nothing will change it throughout the life of the company unless it were to be wound up (dissolved) officially or struck off by the Registrar of Companies.

Mandatory Annual Compliances

A PLC must comply with the following requirements to remain active legally:

1. Annual Return & Financial Statements – Submission of audited accounts and Annual Return (MGT 7) every year before the Registrar of Companies.
2. Director KYC – All directors need to file an e-form DIR-3 KYC annually to keep the DIN number of all directors updated and valid.
3. Non-Compliance Consequences- Failure to file can result in very stringent fines, disqualified directors and up to striking the company name from the MCA register.

Compliance Checklist After Incorporation

While incorporation may be faster in Thailand now, the real work starts after you have registered. So, what could a new one possibly be afraid of? Everything if it doesn’t manage to comply. This is how a brand new PLC must make sense of it all:

1. First Board Meeting – Under Section 173(1), first Board meeting has to be held in 30 days of incorporation. It can be physical or joining from a video conference.
2. Appoint First Auditors – First auditors are required to be appointed by the Board within 30 days or by members at an EGM within 90 days vide Sec 139(1). They are in office until the first AGM.
3. Bank Account – The company needs to open a bank account as it is treated as a lawsuit distinct from the parent company.
4. Directors Disclosure of Other Directorships –Other Directorships to be disclosed by every director at his first meeting of the board and thereafter once in every year (Section 184(1)); The independent directors should also affirm the independence qualifications described above.
5. Registered Office: As per Section 12(1), a registered office shall be set up within 30(Thirty days) and intimated to RoC.
6. Share Certificates- All share certificates to the initial shareholders must be issued within sixty (60) days after incorporation or allotment.
7. Commencement of Business certificate – This must be received within 180 days, proving that the subscribers have paid the amount due on their shares.
8. Keep Statutory Registers – A company must hold certain registers at its registered office. Non-compliance results in penalties.
9. Description of Company’s Name – The company must have its name displayed in its offices, printed on letterheads and negotiable instruments, and even must have a its seal engraved with the company’s name.
10. Books of Accounts – Each company shall be required to maintain the company’s books using double-entry and accrual accounting (s.128).

Memorandum of Association of the Public Limited Company

The Certificate of Incorporation COI) is a legal document and a certificate of the RoC, and it confirms that the company is now registered with Registrar of Companies.

What It Represents

It is evidence that the corporation is a distinct legal entity, which is provided when the process of incorporation is successful.

Key Information on the COI

1. Company Name -The Name filed in registry.
2. CIN – It is a unique registration number.
3. Date of Formation – The day you officially formed your LLC.
4. Registered Office Address – Address of the Company as notified.
5. Type of Company – Public, private etc.

Importance of the COI

1. Legal Existence – Recognizes that the entity is distinct from its owners.
2. Operations – Enable opening of banking account, contract and a transaction.
3. Fundraising – Crucial for getting investment and funding.
4. Genuine Evidence of incorporation as per Companies Act.