Public Limited Company

Best form of business structure for business activities which needs larger amount of capital

Public Limited Company

What is a Public Limited Company?

A company which can raise funds through the issue of share capital to the public is known as a public limited company. The liability of the shareholders remains limited to the unpaid share capital of the subscribed capital. A Public Limited Company is regulated through Companies Act, 2013. It is governed by the Ministry of Corporate Affairs.

Public limited company registration is suitable for a business activity that requires a large amount of funds. Such companies can easily raise money from the market. The shareholders can also transfer their shares easily. A public limited company is further divided into two categories which are Listed Public Company and Unlisted Public Company.

For Public Limited Company registration a minimum of seven persons are required as shareholders. There is no bar on the number of the upper limit of shareholders. Further, a minimum of three individuals are required who will be the directors of the Public Limited Company.

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28000 All Inclusive

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  • 3 DIN (Director Identification Number)
  • 7 DSC (Digital Signature)
  • Drafting of MOA, AOA and other incorporation documents
  • Incorporation of Company via Spice+
  • Stamp duty inclusive up to Authorized capital of Rs.1 Lakh
  • PAN & TAN
  • EPFO
  • ESIC
  • Professional Tax (Maharashtra & Karnataka only)
  • Bank Account
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Benefits of Public Limited Company

Separate Legal Existence

Separate Legal Existence

The Company is considered as artificial person created by law, thus the existence of Public Limited Company is distinct from its members, it enjoys its own identity, and thus it can sue or being sued in its own name and it can also possess the assets in its name.

Limited Liability

Limited Liability

The characteristic of Limited Liability is like cherry on the cake, the shareholders enjoy the privilege of having liability limited only up to the amount of shares subscribed, hence unlike Partnership Firm,investors are attracted to this kind of form of business.

Ease of Raising Fund

Ease of Raising Fund

A Public Limited Company can easily raise capital through the issue of shares from the public. Public is more attracted for the investment in a public company as the shares are easily transferable. Also the debt finance is easily available to a public limited company.

No Minimum Capital Requirement

No Minimum Capital Requirement

There is a misbelief that one requires huge investments to start a Private Limited Company, though in reality there is no minimum capital requirement, one can start a Private Limited Company even with minimal amount.

Easy Share Transfer

Easy Share Transfer

In a Public Limited Company, the shares are held in dematerialized form; hence the process of buy and sell of shares becomes easy.  There is no need of physical share transfer.

Perpetual Existence

Perpetual Existence

The existence of Private Limited Company is not dependent on any factor, hence members and directors of the company may change but it will not affect the status of the Company.

Required Documents for Public Limited Company

The documents required for company registration are categorized as under

For Directors and SubscribersFor Registered office
Permanent Account Number (PAN)Business address proof(Electricity bill/Telephone bill/Gas bill/Mobile bill- not older than 2 months)
Photo Identity proof (Adhar card/Driving License/Election card/Passport)No objection certificate from the owner
Residential address proof (Bank statement/Electricity bill/Telephone bill/Gas bill/Mobile bill- not older than 2 months)Rent agreement (if rented)
Passport size photograph

Procedure of Registration of Public Limited Company

  • Obtaining Digital Signature (DSC)
  • Checking the Name availability
  • Drafting of company registration documents
  • Filing of incorporation forms with MCA

Immediate Post Incorporation Compliance

  • Conducting first board meeting within 30 days of incorporation for the appointment of Auditor
  • Opening of bank account
  • Deposit the amount of subscribed share capital in current account of the company
  • Filing form for the commencement of business
  • Dematerialization of shares

Difference Between Public Limited Company And Private Limited Company

Public Limited CompanyPrivate Limited Company
AboutA Public Limited Company is a publically held company. The shares are easily traded publically.A Private Limited Company is a closely held company. The shares are owned and traded within a small group of persons.
Minimum requirementsTo incorporate a Public Limited Company minimum 3 directors and 7 subscribers are required.To incorporate a Private Limited Company minimum 2 directors and 2 subscribers are required.
Listing of sharesPublic Limited Company can list its shares on the stock exchange.Private Limited Company cannot list its shares on the stock exchange.
Compliance CostAs the compliances are more, the cost is also higher.The compliances are less as compared to Public Limited Company, the cost is also less.
ControlAs the number of shareholders is more, the ownership is diluted hence the control is less.There are limited numbers of shareholders. The decision power is more with the promoters.
AnswerabilityIn Public Limited Company as the shares are owned by the public, the company is more answerable to the public.In Private Limited Company the answerability is less as internal people are only the shareholders.

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Public Limited Company

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A company registered under the Companies Act as a public company that can offer its shares publically without restrictions is known as a public company. It can issue shares to the unlimited number of members and must comply with all the rules & regulations.

There is no minimum capital requirement. A Public Limited Company can be registered with any amount of capital.

Yes, the capital subscribed by the members must be deposited in the current bank account of the company.

Public Limited Company can be incorporated easily with the help of Wisefilings, to incorporate a Public Limited Company there is a requirement of a minimum of 3 persons as directors.

For Public Limited Company incorporationthere is a requirement of a minimum of 7 subscribers.

The full form of DIN is Director Identification Number, which is mandatory to become a Director of any Company or LLP.

For Public Limited Company registration, minimum of 7 subscribers are required and the DSC’s of all subscribers are mandatory.

DIN is an identification number allotted to an individual on the basis of the PAN; hence an individual can only have a single DIN. SO there is no need to apply for DIN again.

Yes, an NRI or a foreign person can become a director in a Public Limited Company. And a minimum of 1 director must be a resident of India.

As part of Annual Compliance, every year the Company needs to file the Forms which includes forms as under and other forms depend on the business activity of the company.

  • AOC-4-is the Form for filing financial statement
  • MGT-7 is the Form for filing an annual return.
  • ADT-1 is for the appointment of Auditor
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