Incorporating a Public Limited Company is a suitable option for large scale businesses that require huge capital. There should be a minimum of seven members with no limit on maximum number of members/shareholders for starting a Public Limited Company.
Usually, Public Limited Companies get listed with stock exchanges to raise capital from the general public. This is why Public Limited Companies have to comply with multiple regulations of the government and starting a public limited company becomes a cumbersome process.
A Public Limited Company is defined under Section 2(71) of the Companies Act, 2013 as:
Note : Under the Companies Act, 2013, a subsidiary company shall be deemed to be a public company if it is not a subsidiary to a private company, even if it is a private company as per its articles.
|Minimum Paid-up share Capital||INR 5 lakhs|
|Minimum number of Directors||3|
|Maximum number of Directors||50|
|Minimum number of Shareholders||7|
|Maximum number of Shareholders||No Limit|
It is necessary that all the documents pertaining to registration of a Public Limited Company are in order to avoid any legal complications later on.
First off, it is necessary that the legal requirements of minimum-paid up share capital, number of directors, number of shareholders, have been identified and fulfilled. Only if this step is complete, further steps of registration can be implemented.
Once it has been established who all would be the directors of the company, their DIN from the Ministry of Corporate Affairs and DSC from the Certified Authority has to be obtained.
The directors can only be individuals and not entities like LLPs or Financial Institutions. Also, the number of directors cannot exceed 50. It is not necessary for the Director to be the Shareholder of the Company
It is necessary to have a proper address to be recognized as the Registered Office of the Company. The Registered Office address has to be registered with Registrar of Companies (ROC) under whose jurisdiction the office location falls. All the correspondence related to business are made to the Registered Office by the ROC. The fee for registration shall be dependent on the authorized capital of the company.
Prior to the registration procedure, the name of the Company has to be approved by the ROC. It is mandatory that the name of the Public Limited Company ends with the word “Limited”. This application is filed in the RUN form of the Ministry of Corporate Affairs. It is better to provide a list of names in order of preference, in case a particular name is not available.
Once the name of the Company has been approved, the crucial documents of the Company – MoA and AoA have to be executed. These documents have now gone electronic and can be prepared and submitted there itself. (eMoA: INC33 & eAoA: INC32)
Once all the documents have been prepared, they are submitted to the ROC for verification.
Upon proper verification of all the submitted documents, the ROC registers the company and issues a Certificate of Incorporation along with the CIN (Corporate Identification Number) of the Company.
A Public Limited Company cannot start its business immediately upon receiving the COI. It has to apply for Certificate of Commencement of Business within 180 days of receiving the COI, stating that all the subscribers have paid the subscription money.
Annual compliances of a Public Limited Company differ for an unlisted Public Limited Company and listed Public Limited Company.
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Opening a current account for a public limited company is easier when compared to opening of current account for a sole proprietorship firm as a company is a registered legal entity – recognized by law. Therefore, once a company is incorporated, a bank account can be opened in the name of a company with the incorporation certificate of the company and identity/address proof of the Directors.
The Director needs to be over 18 years of age and must be a natural person. There are no limitations in terms of citizenship or residency. Therefore, even foreign nationals can be Directors in a Indian Private Limited Company.
You can start a Limited Company with any amount of capital. However, fee must be paid to the Government for issuing a minimum of shares worth Rs.5 lakhs [Authorized Capital Fee] during the incorporation of the Company. There is no requirement to show proof of capital invested during the incorporation process.
An address in India where the registered office of the Company will be situated is required. The premises can be a commercial / industrial / residential where communication from the MCA will be received.
No, you will not have to be present at our office or appear at any office for the incorporation of a Limited Company. All the documents can be scanned and sent through email to our office. Some documents will also have to be couriered to our office.
Identity proof and address proof is mandatory for all the proposed Directors of the Company. PAN Card is mandatory for Indian Nationals. In addition, the landlord of the registered office premises must provide a No Objection Certificate for having the registered office in his/her premises and must submit his/her identity proof and address proof.
IndiaFilings.com can incorporate a Limited Company for in 14-20 days. The time taken for incorporation will depend on submission of relevant documents by the client and speed of Government Approvals. To ensure speedy incorporation, please choose a unique name for your Company and ensure you have all the required documents prior to starting the incorporation process.
Once a Company is incorporated, it will be active and in-existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and maybe struck off from the register after a period of time. A struck-off Company can be revived for a period of upto 20 years.
Director Identification Number is a unique identification number assigned to all existing and proposed Directors of a Company. It is mandatory for all present or proposed Directors to have a Director Identification Number. Director Identification Number never expires and a person can have only one Director Identification Number.
Authorized capital of a Company is the amount of shares a company can issue to it shareholders. Companies have to pay the Government an authorized capital fee to issue shares in a Company. Companies have to pay authorized capital fee for a minimum of Rs.5 lakhs.
A limited company must hold a Board Meeting atleast once in every 3 months. In addition to the Board Meetings, an Annual General Meeting must be conducted by the Private Limited Company, atleast once every year.
Yes, a NRI or Foreign National can be a Director in a Limited Company after obtaining Director Identification Number. However, atleast one Director on the Board of Directors must be a Resident India.
Yes, NRIs / Foreign Nationals / Foreign Companies can hold shares of a Limited Company subject to Foreign Direct Investment (FDI) Guidelines.
100% Foreign Direct Investment is allowed in India in many of the industries under the Automatic Route. Under the Automatic Route, only a post-investment filing is necessary with the RBI indicating the nature of investment made. There are a few industries that require prior approval from the RBI, in such cases, approval must first be obtained from RBI prior to investment.