Meaning of Public Limited Company
According to the Company Act 2013, a Public Limited Company refers to the company which can offer shares to the public and has defined liability.
A public limited company can offer its shares to the public either via (IPO) initial public offering or trading platform like the stock market. Everyone is allowed to acquire the shares offered by PLC.
A Public Limited Company rigidly adheres to the regulations and reveals its accurate financial status to its shareholders.
Suitability & Popularity
A public company is suitable for medium and large-sized businesses that want to raise equity capital from the public. Due to its various advantages, the public limited company is one of the most popular legal entities among medium and large-size companies in India.
Characteristics of Public Limited Company
To understand the concept of PLC better, let us check its characteristics which are as follows:
- Let us have a look at the benefits of establishing a public limited company.
- Directors : Under Companies Act, 2013 provisions, a public limited company must have at least 3 directors.
- Paid-up capital : no minimum capital is required to form a Public Limited Company
- Prospectus : Under the Companies Act, 2013, a public limited company must issue a prospectus that showcases the company’s business affairs, to the public.
- Name : As per Companies Act, 2013, it is mandatory for all the public companies to end their name with the word “Limited”.
- Limited Liability : Public Limited Company limits the liability of each shareholder by making the owners jointly & severally liable for the business’s debts.
Benefits of Public Limited Company Registration
- Additional Capital
Shares offered to the common public in large, allowing everyone to invest in the company, bring additional capital for the company. - Increased Popularity
Listing on a stock market platform increases the popularity of the PLC’s business among the traders dealing in mutual funds, hedge funds, etc which further opens up avenues for business opportunities for the Company. - Divided Risk
The risk of the market gets divided with the allotment of shares among the general public in large. - Success and Business Expansion
Divided risk, increased publicity and additional capital together lead to the opportunities for business expansion & success and investment in new profitable projects.
Eligibility Criteria for Public Limited Company
Following is the list of prerequisites that an individual must fulfill before applying for Public Limited Company Registration:
- Unique Company’s Name: It is essential to ensure that your company’s name does not resemble any other existing Public Limited Company. Therefore, you must validate the Trademark Registration to assure that the name of your company is unique.
- Capital Requirement: A minimum INR 5Lakh is required to start a Public Limited Company in India.
- Director Residency: One amongst the two directors of a PLC must be a resident of India. It means that a Director must have stayed in India for at least 182 days during the previous financial year regardless of its citizenship.
- At Least Seven Shareholders: For Public Limited Company Registration, a company must have at least seven people, who shall act as the company’s shareholders. Besides, there is no maximum limit on the total number of shareholders; a PLC can’t exceed the limit of 15 Directors.
Documents Required for Public LTD Company
Documentation plays a pivotal role in the Registration process of a Public Limited Company. Affix these recent and valid documents with your application:
- Two passport-sized photographs of Directors
- Identification proof of the Directors and shareholders
- PAN Card of each Director and shareholder
- Residential proof of the proposed office (Water Bill, Utility Bill, Rental Agreement etc.)
- NOC (No Objection Certificate) from the landlord where the office is situated
- DIN and DSC of all Directors
- Memorandum of Association (MOA) & Article of Association (AOA)
Public Limited Company Registration Procedure
Follow the simple steps given below to register a Public Limited Company online in India:
- Acquire DSC and DIN: To fill the company incorporation form on the official MCA portal, the applicant must first obtain DSC followed by proceeds for DIN application.
- Name Approval: The next step is to procure name approval by applying in e-Form RUN and check the name’s availability. At this stage, a company can propose two names along with the prescribed fees of INR 1000.
- Filling Incorporation Form: Now fill-up one single application in Form SPICE 32 for the incorporation of Public company and attach all the necessary documents.
- PAN, TAN and Bank Account Application: Once the new Public Limited Company obtains Certificate of Incorporation, one can apply for PAN & TAN and Bank Account opening.
Conclusion
Public Limited Company is undoubtedly an efficient business model from which one can yield various benefits. However, it is imperative to strictly adhere to the compliances under Companies Act, 2013 to sustain the business in future.
The enterprise was founded by Chartered Accountant Mr. Jothilingam S.
