Public Limited Company Registration in India

A Public Limited Company (PLC) is a business structure that allows a company to raise capital from investors by issuing securities to the public, subject to the requirements of applicable laws and regulations. Under Section 2(71) of the Companies Act, 2013, a public company is defined simply as a company that is not a private company.

A PLC has a separate legal identity from its shareholders and can own assets, enter into contracts, incur liabilities, and conduct business in its own name. The Board of Directors manages the company's affairs and oversees its governance, while the managing director or other appointed officers may handle its day-to-day operations. Shareholders receive limited liability protection, which generally limits their financial liability to the amount unpaid on the shares they hold.

A public company can raise capital through permitted methods, including public issues, rights issues, and private placements, subject to the applicable provisions of the Companies Act, 2013, and, where applicable, SEBI regulations. A public company can also list its securities on a recognized stock exchange after meeting the prescribed requirements. This structure can therefore support businesses that require broader access to capital and intend to operate and expand on a larger scale.

Key Features of a Public Limited Company

A Public Limited Company has the following features:

• Limited Liability: Shareholders' liability is generally limited to the amount unpaid on their shares.
• Access to Capital: A public company can obtain funds through avenues such as public offerings, rights issues, or private placements, subject to applicable laws and regulations.
• Separate Legal Entity: The company has a legal identity separate from its members and can own property, enter into contracts, and sue or be sued in its own name.
• Transferability of Shares: Shares of a public company are generally freely transferable, subject to applicable laws and the company's Articles of Association (AoA).
• Perpetual Succession: The company continues to exist independently of changes in its membership or ownership.
• Minimum Membership: A public company must have at least 7 members, with no statutory maximum.
• Name Requirement: The name of a public company must end with the word "Limited."
• Higher Compliance Requirements: Public companies are subject to extensive corporate, financial reporting, disclosure, and governance requirements.

Types of Public Limited Companies

Public Limited Companies generally fall into two categories based on whether their securities are listed on a recognized stock exchange:

• Listed Public Company: A listed public company lists its securities on a recognized stock exchange, such as the BSE or NSE, subject to applicable listing requirements and regulations. Investors can trade its listed securities through the stock exchange.
• Unlisted Public Company: An unlisted public company does not list its securities on a recognized stock exchange. It can raise capital through permitted methods, including private placement and other applicable routes, subject to legal and regulatory requirements.

A Public Limited Company offers several advantages to businesses seeking capital, credibility, and long-term growth:

• Potential Access to Capital: A PLC may have more opportunities to raise funds through public issues, rights issues, and other permitted securities.
• Limited Liability: Shareholders' liability remains limited to the amount unpaid on their shares.
• Enhanced Credibility: A public company can strengthen its credibility with investors, lenders, business partners, and customers through greater transparency and regulatory oversight.
• Transferability of Shares: Shareholders can generally transfer shares more easily, subject to applicable laws and the company's status.
• Employee Incentives: Eligible public companies can use employee stock options and other share-based incentives to attract and retain skilled employees.
• Access to Finance: A public company may have greater access to institutional finance and other funding options, subject to its financial position and eligibility.
• Growth Opportunities: Access to broader sources of capital can support business expansion, acquisitions, infrastructure development, and other long-term growth initiatives.

Before initiating the incorporation of a Public Limited Company, the proposed company must satisfy the requirements prescribed under the Companies Act, 2013. The key eligibility criteria and minimum requirements are as follows:

• A minimum of 7 shareholders, with no upper limit on the number of members.
• A minimum of 3 directors, with no statutory maximum.
• At least one resident director, meaning a director who has stayed in India for at least 182 days during the previous calendar year.
• A Director Identification Number (DIN) for every proposed director.
• A Digital Signature Certificate (DSC) for each proposed director to sign electronic filings.
• No minimum paid-up capital, as per the Companies (Amendment) Act, 2015, so you may start with any amount.
• A registered office in India for official communication.
• A unique company name ending in "Limited" that follows the MCA naming rules.

To successfully register a Public Limited Company in India, you will need to gather and submit the following documents:

• Identity Proof for Shareholders and Directors: Acceptable forms of identification for all shareholders and directors include Aadhaar cards, PAN cards, or voter IDs.
• Address Proof for Shareholders and Directors: Documents proving the residential address are required for all involved members and directors.
• PAN Card Details: Permanent Account Number (PAN) details are necessary for all directors, shareholders, and members of the company.
• Company Office Address Proof: This can be a recent utility bill (not older than two months), such as an electricity bill, telephone bill, or gas bill, confirming the location of your company's registered office or business premises.
• Landlord's Consent Letter: A No-Objection Certificate (NOC) or consent letter from the landlord of your business premises is required, granting permission for your company to operate from that specific location.
• Digital Signature Certificates (DSC): Digital Signature Certificates (DSCs) are mandatory for all designated directors to digitally authenticate documents submitted during the registration process.
• MoA & AoA: Copies of the company's Articles of Association (AoA) and Memorandum of Association (MoA) are essential foundational documents.

Public limited company registration involves setting up the required shareholders, directors, company name, and registered office before filing incorporation documents with the MCA.

Step 1: Obtain Digital Signature Certificates (DSC)

Before initiating the registration, it is mandatory to obtain Digital Signature Certificates (DSC) for all proposed directors and subscribers. The DSC is crucial for electronically filing various forms on the Ministry of Corporate Affairs (MCA) portal.

Step 2: Apply for Director Identification Number (DIN)

Each individual slated to be a director must possess a Director Identification Number (DIN). This can be conveniently applied for using the integrated SPICe+ form, requiring submission of identity and address proofs.

Step 3: Check Company Name Availability

Utilize the MCA online portal to ascertain the availability of your desired company name. This critical step ensures the proposed name is unique and does not infringe upon existing trademarks or company names.

Step 4: File SPICe+ Form

Upon successful name approval, proceed to file the comprehensive SPICe+ form, which consolidates various legalities for company incorporation. Alongside this form, the Memorandum of Association (MoA) and Articles of Association (AoA), outlining the company's constitution and internal rules, must be submitted.

Step 5: Certificate of Incorporation

Following the submission and review of the SPICe+ form and supporting documents, the Registrar of Companies (ROC) will issue the Certificate of Incorporation. This legally validates the company's existence, complete with its Corporate Identification Number (CIN)  and incorporation date.

Step 6: Apply for PAN and TAN

With the Certificate of Incorporation in hand, the subsequent step is to apply for the company's Permanent Account Number (PAN)  and Tax Deduction and Collection Account Number (TAN). Both are indispensable for all tax-related transactions and compliance.

Step 7: Open a Company Bank Account

Finally, establish a bank account in the name of the company. This requires presenting the Certificate of Incorporation, MoA, AoA, PAN, and other relevant documents to the chosen bank, enabling the company to conduct its financial transactions.

In most instances, the entire process is completed within 10 to 15 working days, subject to MCA and ROC approvals and the submission of complete documentation.

For a standard Public Limited Company, the approximate incorporation cost may range from ₹15,000 to ₹45,000 or more, depending on the company's specific requirements and the state in which it is incorporated. Approximate Cost Breakdown:

The above figures are indicative and should be used for budgeting purposes. Government fees and stamp duty may increase with higher authorized share capital, while professional charges depend on the services included in the incorporation package.

Factors Affecting Public Limited Company Registration Cost

The final incorporation cost can vary based on:

• Authorized Share Capital: Higher authorized capital can result in higher applicable government fees and stamp duty.
• Number of Directors: Additional directors may increase DSC and professional service costs.
• State of Incorporation: Stamp duty on incorporation documents varies from state to state.
• Professional Assistance: CA, CS, legal, or company registration service fees vary depending on the complexity and scope of assistance.
• Additional Registrations: GST, MSME, IEC, or other registrations, where applicable, may involve additional charges.

Note: The registration cost does not include the company's share capital or future expenses such as annual ROC compliance, audit fees, taxation, accounting, or other ongoing regulatory costs.

Company incorporation is simpler now, but post-incorporation compliance remains important for every company. Annual compliances for Public Limited Company also require timely filings, records, and disclosures under applicable provisions of the Companies Act, 2013.

1. Hold the First Board Meeting

As per Section 173(1) of the Companies Act 2013, the company must hold its first Board of Directors meeting within 30 days of its incorporation date. Directors are permitted to attend either in person or via video conferencing.

2. Appoint the First Auditor

Under Section 139(6) of the Companies Act, 2013, the Board must appoint the first auditor within 30 days of registration. If the Board fails, members must appoint the auditor within 90 days at an extraordinary general meeting. The first auditor holds office until the conclusion of the first annual general meeting.

3. Open a Company Bank Account

Companies are required to open a bank account. This is essential as the company, being an artificial entity, cannot conduct financial transactions in the name of any natural person.

4. Disclose Director's Interest

At the first Board meeting, every director must disclose their interests in other companies, firms, bodies corporate, or associations under Section 184(1). Directors must also disclose any changes in these interests at the first Board meeting held during each financial year. Independent directors must additionally submit their declaration confirming that they meet the prescribed independence requirements.

5. Establish a Registered Office

Under Section 12(1), a company must establish a registered office within 30 days of its incorporation date. This address will serve as the official point for all communications from various authorities, and the company must inform the Registrar of Companies (ROC) about it within the same 30-day period.

6. Issue Share Certificates

Share certificates must be issued to all subscribers (the initial shareholders) within 60 days of the date of incorporation. For additional share allotments, the 60-day period begins from the date of allotment.

7. Obtain Certificate of Commencement of Business

The company must obtain a certificate of commencement of business within 180 days. This requires filing a disclosure from the directors confirming that every subscriber has paid the amount due on their shares.

8. Maintain Statutory Registers

The company is required to maintain statutory registers at its registered office in the prescribed format. Failure to do so will subject the company to penalties.

9. Display Company Name and Details

Every company must display its name and registered office details at its registered office and other required business locations. The company must also print its name, registered office address, and other prescribed details on its business letters, invoices, and official documents. A common seal is optional and does not need to be maintained by every company.

10. Set Up Books of Accounts

As per Section 128, every company must maintain proper books of accounts that accurately and fairly represent its financial state. The double-entry system must be followed, and accounting should be done on an accrual basis.