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Public Limited Company

A public company means a company that, Is not a private company and has a minimum paid-up capital of five lakhs rupees or such higher paid-up capital as may be prescribed.

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What is a Public Limited Company?

Public Limited Company is a type of Company with the following features:

➲ Is not a private company

➲ Has a minimum paid-up capital of five lakhs rupees or more

➲ Has a minimum of 3 directors

➲ Has a minimum of 7 shareholders

Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles

It is a form of business which is came into existence through companies act. It is a form of business having separate legal entity from its promoter just like other forms of company.  The main advantage of Public limited form of company is that it can raise capital from the public, it can transfer its share from one person to another, and there is more opportunity of growth and expansion under this form of company and many more.

Minimum Legal Requirements

Minimum Legal requirements for incorporating a Public Limited Company:

For incorporating Public Limited form of a company there are certain minimum legal requirements:

➲ Minimum Capital Requirements:

The Minimum paid-up Capital Required for incorporating a public limited company is INR 5,00,000/-. However, there is no upper limited prescribed for the same.

➲ Minimum number of Directors:

A public limited company can be incorporated with a minimum of 3 directors and a maximum of 15 directors.

➲ Minimum Shareholders/Members

A public limited company can be incorporated with a minimum of 7 Shareholders or members. However, there is no upper limit for the number of shareholders in a public limited Company..

Benefits of a Public Limited Company

Public Limited Company form of business is an easy and simple way to get into the corporate world and it is an easy way for a good start-up.  It offers the benefit of limited liability to its members whereas a possibility of issuing shares to the public, which is not the case in a private limited company. This form of the company allows you to raise money from the public, you can allot or transfer the shares to the public. It also offers fewer restrictions in terms of transferability of shares as compared to A private limited Company.

 Shares are freely transferable and no one’s consent is required for such transfer.

The liability of the shareholder(s) is limited to face value of their respective shares

 Day to day activities of the Company are not undertaken by the shareholders

 Can raise capital from the public

Documents Required for incorporating a Public Limited Company

Mandatory Documents

  • PAN card of all the shareholders and directors.
  • Aadhar card of all the shareholders and directors

➲ ID proof of proposed Directors and members (any one of the following):

  • Passport
  • Voter’s ID
  • Driving License

➲ Address proof of proposed shareholders and directors (any one of the following):

  • Telephone bill
  • Mobile Bill
  • Bank statement
  • Electricity bill

➲ Address proof for the principal place of business of the proposed company (any one of the following)

  • Utility bill like telephone bill, electricity bill, gas bill, water bill
  • Rent agreement with rent slip
  • Proof of ownership

Process for incorporation of a Public Limited Company

  1. Apply for name

First step in incorporating a company is for reserving the name of proposed company in part-A of SPICe Plus (SPICe+) form. In this form choose your business activity and file for two proposed name, if CRC will reject the proposed name then file again with two new name within the certain time limit from the date of rejection (15 days) .

 

  1. Apply for DSC

Next step is to apply for DSC (Digital Signature Certificate) which will be used for signing the forms by proposed directors and proposed members respectively. Procure DSC for both proposed directors and member, if both are different.

  1. Fill the SPICe plus Form (SPICe+)

Once, your name get reserved under it will be valid for 20 days from the date of approval, within 20 days you have to fill up the form and upload it online.SPICe+ is advance form combination of 8 forms in one. Through this proposed company can apply for at once:

  • Name reservation
  • Incorporation
  • Apply for DIN
  • TAN
  • PAN
  • EPFO
  • ESIC
  • GSTIN

 Next step is to fill the part-B of SPICe + which will contain all the detail related to incorporating company like number total number of directors and members, Authorized share capital, paid up capital, number of share hold by members, company registered address detail, directors and member detail and will required attachments for proof. Then draft the MOA (memorandum of association) and AOA (Article of Association) of proposed company, then fill form required for EPFO and ESIC registration with detail, then Fill the AGILE form for procuring GSTIN. After filling all these attach the signature and then upload it on MCA website.

Difference between Private Limited company and Public limited company:

Particulars

Private

Public

Definition

As per companies act 2013 Private company mean company incorporated under company’s act 2013 having paid-up share capital as may be prescribed, and which by its articles, —

  1. Restricts the right to transfer its shares:
  2. Except in case of OPC, limits the number of its member to two hundred:

 

A company which is not a private company

Minimum Capital

No minimum capital required

5 Lakh

Minimum Shareholders/members

Two

Seven

Minimum numbers of directors

Two

Three

Transferability

Members can not transfer shares to general public

Can transfer shares to general public

Maximum numbers of members

200

Unlimited

Listing of shares

Cannot list

Can list

FAQs

Q. What is a public limited company?

A. A company that is not a private company is called a public limited company, which can transfer its share easily and can invite the public for investment.

 

Q. Pre-requisite for a public limited company?

A. -Must have paid-up capital of minimum 5 lakhs

    -Must have a minimum of 3 directors

    -Must have a minimum of 7 subscribers/shareholder

 

Q. Benefits of a public limited company?

-Transferability of shares.

-Can invite general public for investment

-The liability of members is limited

 

Q. Documents required for incorporating a company?

A. ID proof of proposed Directors and members:

i. PAN card (Mandatory)

ii. Aadhar card (Mandatory)

iii. Photograph of the proposed director (mandatory)

iv. Passport  or Voter’s ID or Driving License

B. Address proof of proposed members and directors (any one of  the following):

i. Telephone bill

ii. Mobile Bill

iii. Bank statement

iv. Electricity bill

C. Address proof for the principal place of business of the proposed company (any one of  the following)

i. Utility bill like telephone bill, electricity bill, gas bill, water bill

ii. Rent agreement with rent slip

   iii. Proof of ownership

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