Registration of Public Limited Company

At A2Z FINEDGE, we specialize in providing taxation compliance and filing services for businesses aiming to establish public limited companies. With our expert team comprising Chartered Accountants (CAs), Company Secretaries (CSs), MBAs, lawyers, and advocates, we ensure seamless registration and compliance processes. Here, we present a detailed guide to understanding public limited companies and their registration requirements.

What is a Public Limited Company?

A public limited company (PLC) is a company that offers its shares to the public and allows them to be freely traded on the stock exchange. Governed by the Companies Act, 2013, public limited companies are typically larger entities that seek to raise capital from the public and institutional investors. This business structure is suitable for companies aiming for growth, expansion, and increased credibility.

Types of Public Limited Companies

1. Listed Public Limited Company:
• Shares are listed on recognized stock exchanges and can be traded publicly.
2. Unlisted Public Limited Company:
• Shares are not listed on stock exchanges but can still be offered to the public through private placements.

Key Features of a Public Limited Company

1. Separate Legal Entity:
• The company is a distinct legal entity, separate from its shareholders and directors.
2. Perpetual Succession:
• The company continues to exist irrespective of changes in ownership or management.
3. Limited Liability:
• Shareholders’ liability is limited to the amount unpaid on their shares.
4. Minimum Requirements:
• At least three directors and seven shareholders are required for incorporation.
5. Capital Raising:
• Can raise capital from the public, institutional investors, or both.
6. Regulatory Compliance:
• Adheres to stricter regulatory and disclosure norms compared to private companies.

Minimum Requirements for Public Limited Company and Its Registration

1. Directors:
• A minimum of three directors is required, and at least one must be a resident of India.
• Directors must obtain a Director Identification Number (DIN).
2. Independent Directors:
• At least one-third of the board must comprise independent directors if the company is listed.
• Independent directors ensure transparency, compliance, and unbiased decision-making.
3. Eligibility for Independent Directors:
• Must not have any material or pecuniary relationship with the company.
• Should possess relevant expertise or experience in fields such as finance, law, or business management.
• Must meet the criteria outlined in Section 149(6) of the Companies Act, 2013.
4. Shareholders:
• A minimum of seven shareholders is necessary to incorporate a public limited company.
5. Capital Requirement:
• There is no statutory minimum capital requirement, but the authorized capital must be sufficient to meet business needs.
6. Registered Office:
• A physical office address in India is mandatory and must be documented with address proof.
7. Company Name:
• The company name must be unique and should not infringe upon trademarks or existing company names.
8. Memorandum of Association (MoA) and Articles of Association (AoA):
• These documents must be drafted to outline the company’s objectives and operational framework.
9. Digital Signature Certificate (DSC):
• All directors must have DSCs to file electronic documents with the Ministry of Corporate Affairs (MCA).
10. Statutory Compliance:

• The company must comply with all provisions under the Companies Act, 2013, and related regulations.

Eligibility to Become a Director or Independent Director

1. Director:
• Must be at least 18 years old.
• Must not have been declared insolvent or convicted of an offense involving moral turpitude.
• Should hold a valid Director Identification Number (DIN).
• Foreign nationals are eligible, provided they meet compliance requirements.
2. Independent Director:
• Should possess relevant expertise or experience in business, finance, law, or governance.
• Must not have any direct or indirect financial or familial relationship with the company.
• Should meet the independence criteria under Section 149(6) of the Companies Act, 2013.

Advantages of a Public Limited Company

1. Access to Capital:
• Ability to raise funds through public offerings and private placements.
2. Enhanced Credibility:
• Public companies are perceived as more credible by investors, lenders, and stakeholders.
3. Liquidity for Shareholders:
• Shares can be freely traded, providing liquidity to investors.
4. Growth Opportunities:
• Easier access to funds facilitates expansion and diversification.
5. Transferability of Shares:
• Shareholders can transfer their shares without restrictions.
6. Attracting Talent:
• Stock options and other incentives attract skilled professionals.

Documents Required for Public Limited Company Registration

1. Directors and Shareholders:
• PAN Card
• Aadhaar Card
• Passport (for foreign nationals)
• Address Proof (Electricity Bill, Bank Statement, etc.)
• Passport-sized photographs
2. Registered Office:
• Rent Agreement or Property Ownership Documents
• Utility Bill (not older than two months)
• NOC from Property Owner
3. Company Documents:
• Memorandum of Association (MoA)
• Articles of Association (AoA)
4. Digital Signature Certificates (DSC):
• Required for all directors and authorized signatories.
5. Director Identification Numbers (DIN):
• Necessary for all directors.
6. Banker’s Certificate:
• Certifying availability of funds for the initial capital.

Step-by-Step Procedure for Registration of a Public Limited Company

1. Name Approval:
• Submit the proposed name for approval through the RUN (Reserve Unique Name) service on the MCA portal.
2. Obtain Digital Signatures and DIN:
• Acquire DSCs for all directors and apply for their DINs.
3. Draft MoA and AoA:
• Prepare the Memorandum of Association and Articles of Association, outlining the company’s objectives and operational framework.
4. Filing SPICe+ Form:
• File the SPICe+ form on the MCA portal, including PAN and TAN applications.
5. Verification by Registrar of Companies (RoC):
• The RoC reviews the application and may request additional information.
6. Issuance of Certificate of Incorporation:
• Upon approval, the Certificate of Incorporation is issued, marking the company’s legal formation.
7. Post-Incorporation Compliance:
• Obtain GST registration, open a bank account, and adhere to other statutory compliance requirements.

Compliance Requirements for Public Limited Companies

1. Annual General Meeting (AGM):
• Mandatory to hold AGMs annually.
2. Filing of Annual Returns:
• File Form MGT-7 and AOC-4 with the RoC.
3. Statutory Audits:
• Conduct audits by a qualified Chartered Accountant.
4. Board Meetings:
• Hold at least four board meetings annually.
5. Disclosure Requirements:
• Ensure compliance with disclosure norms set by the Companies Act and SEBI.
6. Maintenance of Registers:
• Maintain statutory registers, including the Register of Members and Register of Directors.

Frequently Asked Questions (FAQs)

1. What are the advantages of registering a public limited company?
• Public limited companies allow access to capital markets, provide enhanced credibility, enable share liquidity, and offer significant growth opportunities.
2. What is the minimum number of directors and shareholders required for incorporation?
• A minimum of three directors and seven shareholders are required.
3. What is the role of independent directors in a public limited company?
• Independent directors ensure compliance with governance standards, promote transparency, and oversee critical decisions impartially.
4. Are there restrictions on foreign nationals serving as directors or shareholders?
• Foreign nationals can serve as directors or shareholders, provided they meet eligibility criteria and regulatory compliance requirements.
5. What are the key compliance requirements post-registration?
• Public limited companies must conduct AGMs, file annual returns, perform statutory audits, and adhere to SEBI and Companies Act disclosure norms.
6. How long does the registration process take?
• The process typically takes 10-20 working days, depending on document readiness and verification.
7. Is there a mandatory requirement for independent directors?
• Yes, listed public limited companies must have at least one-third of their board as independent directors.
8. What documents are required for the registration of a public limited company?
• Key documents include MoA, AoA, DSC, DIN, address proofs, and NOC from the property owner for the registered office.
9. Can public limited companies list their shares immediately after incorporation?
• No, listing requires fulfilling additional SEBI and stock exchange criteria, including filing a prospectus and obtaining approvals.
10. What is the penalty for non-compliance with the Companies Act for public limited companies?
• Penalties may include fines, legal action against directors, and potential disqualification of directors for severe violations.

Why Choose Filingscenter?

• Expert Team: Our professionals have extensive experience in public limited company registration.
• Comprehensive Solutions: From documentation to compliance, we handle it all.
• Transparent Pricing: No hidden charges; complete clarity throughout the process.
• Timely Execution: We ensure a smooth and timely registration process.
• Post-Registration Support: Continued assistance with compliance and governance.

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