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
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
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.
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.