Public Limited Company

A public limited company is form of organization in which more than one person whether natural or artificial come together to earn profits, this type of business limits owners (shareholders) liability to the extent of their shareholding in the company.

There is no restriction on the number of shareholders in public limited company and further the shares of public limited company can be transferred freely in public. To define the public company in brief, it has all advantages of private limited company gaining with no restriction on number of shareholders and easy transferability of shares.



Inclusion

3 DSC of Directors

2 DIN of Directors

Incorporation with Registrar of Companies

Customized Memorandum of Association and Article of association.

VAT/SERVICE TAX/EXCISE/IEC or any other registration applicable and selected by the user.

Courier charges of sending the original certificate and 1 original MOA & AOA at your address.

Any Government Fee or charges payable.

Application of PAN and or TAN

EXCLUSIONS

Inspection fee payable at the time of visit to the officer if any.

Fresh application fee if registration applicable is rejected due any discrepancies in documents of the applicant.

Post Incorporation filings of documents

Any registration with government department not selected by the user.

REQUIRED DOCUMENTS

Identity and Address Proof of the Applicant directors and subscribers

Copy of PAN card of subscribers (for DIN and registration with govt. department)

Passport size Photographs of subsribers, if applicable

Address Proof and NOC for proposed address of Company.

Consent letter for admission as directors

Any other documents according to selected registration.

TIMELINE

2 days process for gathering the necessary details and documents

2 days process of DSC application of directors

1 day process for application of DIN

2 days process for preparing documents, MOA & AOA for submission of forms (if customized time depends upon time take by client)

7-9 days process for approval from the date of submission and providing certificate of incorporation.

7 days process of PAN application

1 day process for getting documents ready for submission to govt. after receipt of PAN.

2 day process for submitting application to government after signing and verification of all documents.

1 day process for providing certificate after approval from relevant department and updating its status.




FREQUENTY ASKED QUESTIONS


1. What is Public Limited company?

A public limited company is form of organization in which more than one person whether natural or artificial come together to earn profits, this type of business limits owners (shareholders) liability to the extent of their shareholding in the company. There is no restriction on the number of shareholders in public limited company and further the shares of public limited company can be transferred freely in public. To define the public company in brief, it has all advantages of private limited company gaining with no restriction on number of shareholders and easy transferability of shares.

2. Who can become member in public limited company?

Any natural person or entity having separate legal identity can become member in the public limited company, but there shall be atleast 7 members and 3 directors to form a public limited company.

3. What are the minimum and maximum number of directors in a private limited company?

A public limited company should have atleast 3 directors and maximum 15 directors.

4. Whether registration of public limited company is mandatory?

Yes for formation of public limited company registration with registrar to companies is mandatory. To know the process click here.

5. What are the agreement or deed governing the bye laws of the company?

In case of companies the area of operation i.e. business activities, its relation with outsiders, restriction on transfer of shares, directorship and internal mode of operation of company are governed and is written in documents which is called Memorandum of association and Article of association. The Memorandum and Article of association are the basic documents of the company which are mandatory and just like constitution of the company. To know more about Memorandum and association and article of association click here.

6. What is minimum amount of paid up capital required to start public limited company?

There is no upper limit, however minimum paid up capital of Rs500000/- (Five Lac rupees) is required to be introduced in order to incorporation/form public limited company. In the public limited company paid capital of the company is restricted to the extent of authorized capital of the company and in order to enhance the paid up capital, one has to increase the authorized capital of the company.

7. How can i invest money/paid up capital in public limited company?

In public limited company whether it is subscribers initial capital or further issue of shares (except right issue or sweat equity shares) investment is required to be made through proper banking channel separate bank account of the company. Refer section 42 of the companies act, 2013.

8. Can i open a bank account of Public Limited company?

Yes, with the certificate of incorporation, Commencement of business and Memorandum of association bank account after complying with other RBI Norms can be opened, there is no need to apply any other registration with government department like VAT or Service Tax etc.. To know more about how to open bank account click here.

9. Whether registration with government departments are mandatory ?

No, only applicable government registrations are mandatory like if sales exceed specified limit of turnover then registration with Value Added Tax (VAT), Service Tax Registration, Excise or shop and establishment as applicable are mandatory. To know about registration with government departments click here.

10. What are the maximum number of shareholders in public limited company?

In public limited company there is no limit on the number of shareholders in the company. Further the shares of a public limited company can be easily transferred without any restrictions.

11. What are the advantages of Start business as Public Limited Company?

Advantage
LIMITED LIABILITY

It means that if the company experience financial distress because of normal business activity, the personal assets of shareholders will not be at risk of being seized by creditors.

Advantage
CONTINUITY OF EXISTENCE

Business is not affected by the status of the owner.

Advantage
Separate Legal Identity

A company is having a separate legal identity from its shareholders be it a private limited company or public limited company. There it have vide recognition in the commercial industry.

Advantage
MINIMUM NUMBER OF SHAREHOLDERS

Minimum number of shareholders need to start the business are only 7.

Advantage
MORE CAPITAL

More capital can be raised as there is no limit on the maximum number of shareholders, and thus huge amount of investors capital can be raised either through private placement or public issue.

Advantage
SCOPE OF EXPANSION

Scope of expansion is higher because easy to raise capital from public, financial institutions and the advantage of limited liability.

Advantage
EASY TRANSFERABILITY

The shares of the public limited company can be easily transferred to any other person with just signing a share transfer form and handing over the share certificate.

Advantage
BRAND VALUE

Company’s brand value will get increased because people come to know about the company very well.

Advantage
VALUATION

Since the share price reflects the company’s financial healthiness it would become easy to arrive at a price in case of mergers and acquisitions.

Advantage
EQUITY FUNDING OR BANK FINANCE

This type of business structure are most preferable by angle investors or venture capitalists, they give preferences to this type of business structure and can invest money through equity investment, since it also gives them option of easy transferability of shares. All banks and financial institutions give more preference to advance loans and funding to companies rather than proprietorship and partnership firms.

Advantage
NO LIABILITY IN CASE OF FRAUDS BY DIRECTORS

The day to day operations and business decisions in the companies are taken by the board of directors, and if any fraud is made by them, then they will personally liable for the fraud and they will also be liable for prosecution. However there is no shareholders liability in case of fraud by the management of the company if shareholders are not involved.

Advantage
Owning Property

A company being separate legal entity can purchase, sale, hold in its name any immovable or moveble properties. Moreover company being a going concern, no shareholder can claim upon the property of the company.

12. Can a public limited company invite investor’s money?

Yes, this type of business structure are most preferable by angle investors or venture capitalists, they give preferences to this type of business structure and can invest money through equity investment, since it also gives them option of easy transferability of shares. All banks and financial institutions give more preference to advance loans and funding to companies rather than proprietorship and partnership firms.

13. Whether name of the company is protected against duplication? Or whether name of an existing company be used for form new company?

No unlike partnership firm, in case of limited liability partnership and companies name of an existing company cannot be taken by any other person. If anyone tries to take same name it will not be approved by the registrar of companies. So it provide protection of theft of name irrespective of whether trademark of name is taken or not. Further taking name of the company requires approval from the registrar of companies and should company with the guidelines issued from time to time. To know more about such guidelines click here.

14. Which forms are required to be filed with registrar of companies by Public limited companies?

To know the forms which are required to filed with registrar of companies, click here.

15. Whether subsequent to receipt of incorporation certificate, public limited company can start business?

No in order to commence the business operations public limited companies are required to obtain commencement of business certificate from the Registrar of Companies.

16. What are the due dates of filing of forms of Public limited company and penalties for late filing of forms of public limited company?

To know the due date of filing forms with registrar of companies, click here.

17. How can i compare public limited company with other form starting business? Same as properitor.

Basis Sole Proprietorship Partnership Limited Liability Partnership Pvt. Ltd Co OPC Public Limited Company
Annual income tax return filing Filing of return is compulsory only if the Gross Total income exceeds the Exemption limit. Compulsory irrespective of profit or loss earned by entity during the year. Compulsory irrespective of profit or loss earned by entity during the year. Compulsory irrespective of profit or loss earned by entity during the year. Compulsory irrespective of profit or loss earned by entity during the year. Compulsory
Statutory Audit Not Applicable Not Applicable Not Applicable Compulsory Compulsory Compulsory
Liability Unlimited liability Unlimited liability As the name itself suggests, there is limited liability in case of limited liability partnership. Limited by Guarantee or Shares Limited by Guarantee or Shares Limited by shares
Ownership and Control One person has total control and ownership of the enterprise. Ownership and Control is through mutual agreement. Ownership and control is through mutual agreement. Ownership and control is amongst the shareholders of the co. Ownership and control is in the hands of only one member. Ownership is amongst the shareholders and control among the directors chosen by shareholders
  One Minimum 2 Minimum 2 Minimum 2 One Minimum 7
Complications Sole proprietorship is the least complicated form of business. Partnership is also less complicated as compared to company but more complicated as compared to sole proprietorship. Partnership is also less complicated as compared to company but more complicated as compared to sole proprietorship. Most complicated as compared to sole proprietorship and partnership firms. Most complicated as compared to sole proprietorship and partnership firms. Most complicated as compared to private limited company
Risk Risk is very high. Risk is high. Risk is low as liability is limited. Risk is low as shareholder’s liability is restricted to unpaid calls only or any specified amount of guarantee in case of co. limited by guarantee. Risk is low as liability is limited. Risk is low as liability is restricted to shareholding amount and unpaid calls only.
Transferability Cannot Transfer, only in case of death of proprietor New partners can be admitted and old partners can resign New partners can be admitted and old partners can resign Shares can be transferred with restrictions to public There is restriction of transfer of shares subject to change in nominee and directors Shares can be easily transferred without restriction.