A public limited company is a voluntary association of members which can be incorporated by seven or more persons. It has a separate legal existence apart from its members who compose it. It must have a minimum of seven members but there is no limit as regards the maximum number. It’s shares are freely transferable and that too without the prior consent of other shareholders. It is independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders. These companies can invite capital and deposits from the public. These Companies can be listed or unlisted.
- Minimum Seven People: Minimum seven people are required to start the public limited company in India. These companies shall have minimum three directors. The same seven people can become shareholder and director of the company. However, maximum any number of people can become shareholder in the public limited company.
- No Minimum Capital: Capital of the business is depending on the need of the business and statutory no minimum capital is required to start the public limited company. However, minimum authorized and subscribed share capital required for public company is Rupees five lakh.
- One Resident Director: Among director, one person must be resident Indian.
- Unique Name: The name of the public limited company should be unique and should not be similar to the any existing company name or trademark.
Identity proof of Directors and Shareholders
- PAN Card for Indian Nationals (Mandatory)
- Passport for Foreign Nationals (Mandatory)
- Proof of nationality for Foreign Nationals
- Proof of Identity (Voter ID/Passport/Driving License) (any one)
- Resolution of the board of company / LLP for authorization of director/partner
- 2 Passport size photos.
Address proof of Directors and Shareholders
- Bank statement/Electricity/Telephone/Mobile bill) (not older than two months) (any one)
Proof of Registered office
- Conveyance/ Lease deed/Rent Agreement etc. along with rent receipts (any one)
- Copy of the utility bills (Telephone/Gas/Electricity bill) (not older than two months) (any one)
- NOC from Landlord
- DSC form (physically signed)
Note: All the Documents in case of Foreign Director should be additionally complied as follows:
- Notarized (if residing in commonwealth countries)
- Notarized & Apostiled (if residing in country which is signatory to Hague convention)
- Notarized & Consularised (If not covered in above categories)
- Name reservation: The first step in incorporation is to reserve/approve the name of company. The proposed name selected should do not contain any word which is prohibited under Companies Act, 2013. An approved name is valid for a period of 20 days from the date of approval, for a new company. It is permitted to apply for two proposed names and one Resubmission (RSUB) while Reserving Unique Names for companies through the RUN web service.
- Digital Signature Certificate (DSC): The application for registration filed online and it is mandatorily required to be signed by the director and shareholder of the company. So DSC is required to be taken for the directors and shareholder of the company, who is required to sign the e-form for registration before filing incorporation application for the company. Photo, ID and Address proof is required to along with DSC application form for issuance of DSC.
- Obtain Director Identification Number (DIN): DIN is a unique identification number to the director issued by Registrar of the companies (ROC) for becoming a director in India. An application is filed along with ID and address proof duly attested by CS/CMA/CA.
- Approval of other authorities: The Registrar of Companies may require the applicant to furnish the approval or concurrence of any department,regulatory body, appropriate authority, or Ministry of the Central or State Government(s) in relation to the work to be done.
- Document submission: Application for registration/incorporation of public limited company is made to Registrar of Companies (ROC) along Memorandum and Article of Associations, declaration, affidavits etc. Minimum Seven persons are required for incorporation of public limited company.
- Certificate of Incorporation: ROC then scrutinizes the incorporation form and documents, if ROC finds the documents are in order, issues Certificate of Incorporation which is the Registration certificate of public limited company. After receiving the certificate of Incorporation the public limited company is set to start its function.
- PAN & TAN of the company: PAN and TAN are simultaneously applied alongwith company registration forms and are issued along with Certificate of Incorporation and also mentions into Certificate of Incorporation.
- Opening of Bank Account: On submission of Certificate of Incorporation & other essential documents, bank open a current account in name of company, required for smooth running of the company.
- Larger amount of capital: Such company can bring more capital as compared to other form of organization. There can be unlimited number of shareholders, who can contribute to the capital of the public limited company.
- Efficient management: Such company is more efficiently managed entities as compared to other form of organization. These have larger pool of talented people, who contribute in efficient management of public limited company.
- Free transfer of shares: The shares of a such company are freely transferable and that too without the prior consent of other shareholders, as compared to private limited companies.
- Larger Borrowing Power: Public companies are most recognized in terms of financial assistance/borrowing from banks and financial institution and also there are several financial instruments available to public limited companies, which are not available to other form of business organization.
- Limited Liability of shareholder: Liability of shareholders of the public limited company are limited only up to the shares subscribed by them and should not be personally liable for the debts of the company in case company are unable to pay its liabilities.
- Separate Legal Entity: Public limited company legal entity are separate than its shareholders/promoters.
- Perpetual Existence: Public limited company existence will go for ever and its existence will not be effected by the death of shareholders, directors or transfer of shares to others.
- Capacity to Sue and to be Sued: Public limited company can take legal action against another and also other person can take legal action against company separate from directors, shareholders & promoters.
- Ownership of property: Public limited company can sale, purchase and own the property like individual.