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.
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
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..
➲ Mandatory Documents
➲ ID proof of proposed Directors and members (any one of the following):
➲ Address proof of proposed shareholders and directors (any one of the following):
➲ Address proof for the principal place of business of the proposed company (any one of the following)
➲ Application for DSC of all the members and directors.
➲ After issuance of DSC and application for approval of name for the proposed Company is to be submitted with the MCA through form “RUN” (reservation of unique name) Form.
➲ On approval of the name through RUN Form, all the respective drafts are prepared for the application for incorporation of the proposed Company.
➲ Post preparation of the drafts an application for incorporation of the proposed Company is submitted with the ROC through "SPICe” Form, along with which all details of the members and directors submitted in MCA for scrutiny
➲ After keen scrutiny, the respective ROC issues the Certificate of incorporation of the Company.
➲ After receiving the certificate of incorporation the Company has to mandatorily file the Certificate of Commencement of Business, in order to conduct business activities.
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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