Public Limited Company

Overview of Public Limited Company Registration

Public limited companies enjoy all the rights of a corporate entity with limited liabilities and it is an ideal choice for the small and medium scale enterprises who wish to raise the equity capital from the general public.

Below we are going to provide full knowledge of the features, procedure and document requirement for Public Company Registration.

Basic Clarification on Incorporation of Public Limited Company

Just like other companies, Public Limited Company is also registered as per the rules and regulations of the Companies Act, 2013. A public Company enjoys the benefits of limited liabilities for its members and has rights to sell its shares for raising capital for the company. It can be incorporated with a minimum number of three directors and has more stringent rules and regulations as compared to a Pvt. Ltd. Company.

It must have a minimum number of seven members whereas there is no limit for the maximum number of members. It provides all the benefits of a private limited company along with more transparency and easy transferability of ownership and shareholding. Name, shares, formation, number of members, management and directors, etc are the special features that differentiate any Public limited company from private limited companies.

Documents Required for Public Limited Company Registration

Apart from the  Incorporation Application, the list of following documents needs to be procured from the end of the applicant: An applicant has to collect all these documents to file along with the incorporation application:

• Identity Proof such as Aadhar card, PAN card, Driving License, and Voter Id of all the designated directors and shareholders. 
• Address Proof of all the proposed directors and shareholders of the company.
• PAN card details of all the directors and shareholders
• Utility bills such as telephone, gas, water, or electricity bill of the registered office as residential proof of the business place. It should not be older than 2 months. 
• A NOC or No Objection Certificate from the landlord of the business place. 
• DSC or Digital Signature Certificate of the designated directors
• Memorandum of Association (MOA) and Article of Association (AOA)

Features of Public Limited Company Registration

Here are some important features of Public Limited Company:

Number of Directors in the company 
As stated in the provisions of the Companies Act, a public company must have a minimum number of 3 directors to incorporate a company whereas there is no restriction on the maximum number of directors.

Name of the Company 
All the Public limited companies must add the “Limited” word at the end of their name. it is denoted as an identity of a public company.

Prospectus of the Company 
Prospectus of the company is mandatory for public limited companies. It is issued by the proposed company for its general public. It is a note of comprehensive statements of works and affairs of the company. However private companies have no such compliances as they don’t have the right to invite the public to subscribe to their shares.

Paid-up Capital 
As per the requirements of the act, no minimum capital is required for registration.

What is the Difference Between the Public Limited Company and Private Limited Company?

There are various points of differences between both of  these companies. Here are some majorchief differences between both:

Benefits of Public Limited Company Registration

Here are the benefits provided to the company with Public Limited company registration

Limited liabilities for the shareholders of the company
Shareholders of the public company enjoy the benefits of limited liabilities under which their assets are safe and cannot be used to clear the debts and losses of the company. Despite it, the shareholders are responsible for their own legal offenses. All the members, directors, and shareholders enjoy this right and their assets cannot be seized by any bank, creditors, or government bodies.

Perpetual Succession
A public limited company is considered a corporate body that has perpetual succession. This means in case of death, retirement, insanity, and insolvency of one or more members/shareholders/ directors, the company still continues its existence.

Improved capital of the company
In a public limited company, the general public is invited to buy the shares of the company. Hence, anyone can invest in a public company that improves the capital of the proposed company.

Borrowing Capacity
A public company can enjoy unlimited sources for borrowing funds. It can issue equity, and debentures and can accept deposits from the general public by selling its shares. Moreover, most financial institutions find public companies more prominent than other unregistered companies.

Fewer Risks 
Since public companies can sell their shares to the public, it lesser the scope of unsystematic risks in the market.

Better opportunities for growth and expansion of the company: 

Fewer risks lead to better opportunities so that the company can grow and expand by investing in new projects from the funds raised by selling its shares in the market.

Public Limited Company Registration Procedure

Step 1: Application for the Digital Signature Certificate
The very first step is to apply for the  Digital Signature of all the proposed directors in the company. DSC is used to sign the e-forms and is an authentic and safe method to file all the documents on an electronic platform. It is a mandatory document.

A director can easily obtain DSC from the nearest Certifying Authorities or CAs with self-attested copies of their identity proof. It takes around 1 -3 working days to obtain a DSC.

Step 2: Name Verification
The second step involves the name registration of the company. The name availability can be checked through the MCA portal by following this step:

Visit the MCA Portal > select the MCA services > Click Check Company Name

Note: The company name should not be taken or registered and should not be similar to a brand name.

Step 3: Filing Form SPICe+
Once the company’s name has been approved you can now file the SPICe+ form to avail of the company incorporation certificate. Along with it, you have to file all the required documents such as MOA (Memorandum of Association) and AOA (Article of Association). These two documents contain the details of the mission, objectives, aims, visions, business activities, responsibilities of all the directors and shareholders, and the definition of the proposed company.

All the documents and applications are further verified by the higher authorities and it takes around 7 to 9 working days.

Step 4: Obtaining a Certificate of Incorporation
Once all the applications and documents have been received by the authorities and they have verified them, the company would receive the Certificate of Incorporation which will include the CIN and date of incorporation.

Steps To Be Taken To Incorporate a New Company

Steps to be taken to get a new company incorporated:

• Select in the order of preference, at least one suitable name up to a maximum of two names, indicative of the main objects of the company.
• Ensure that the name does not resemble the name of any other already registered company and also does not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950) by availing the services of checking name availability on the portal.
• Apply to the concerned RoC to ascertain the availability of name in Spice Part  A by logging in to the portal. A fee of Rs. 1000/- has to be paid alongside. If proposed name is not available, the user has apply for a fresh name on the same application.
• After the name approval the applicant can apply for registration of the new company by filing the required forms within 20 days of name approval
• Arrange for the drafting of the memorandum and articles of association by the solicitors, vetting of the same by RoC and printing of the same.
• Arrange for stamping of the memorandum and articles with the appropriate stamp duty.
• Get the Memorandum and the Articles signed by at least two subscribers in his/her own hand, his/her father's name, occupation, address and the number of shares subscribed for and witnessed by at least one person.
• Ensure that the Memorandum and Article is dated on a date after the date of stamping.
• Login to the portal and fill the following forms and attach the mandatory documents listed in the eForm

Submit the following eForms after attaching the digital signature, pay the requisite filing and registration fees, and send the physical copy of the Memorandum and Article of Association to the RoC

• After processing of the Form is complete and Corporate Identity is generated obtain a Certificate of Incorporation from RoC.

Additional steps to be taken for the formation of a Public Limited Company:

• To obtain a Commencement of Business Certificate after incorporation of the company the public company has to make the following compliance
  1. File a declaration in eForm 20A and attach the statement in lieu of the prospectus(schedule III) OR
  2. File a declaration in eForm 19 and attach the prospectus (Schedule II) to it.
  3. Obtain the Certificate of Commencement of Business.

Requirements for the Public Company Registration

According to the provisions of the Companies Act, 2013 here are the requirements that you needs to be  fulfilled to incorporate a Public company in India:

• The proposed company must have a minimum number of 7 shareholders
• The proposed company must have a minimum number of 3 directors 
•  No minimum capital required
• Directors and subscribers should have a Digital Signature Certificate 
• Memorandum of Association and Article of Association.
• After approval from the Registrar of the Companies, the proposed public company has to apply for the “Certificate of Business Commencement.”