Public Limited Company Registration in India: A Comprehensive Guide

Public Limited Company Registration
Shivam Narwal
| Updated: Mar 21, 2023 | Category: Public Limited Company

A Public Limited Company is a type of business entity that has its shares available to the general public for investment. These companies are considered to be large-scale businesses, and they are subject to strict regulations and compliance requirements in India. Registering a public limited company in India involves several steps and procedures. In this blog, we will discuss the process of public limited company registration in India.

Necessary Requirements for Public Limited Company Registration in India

Before we delve into the process of public limited company registration in India, let us first understand the requirements that need to be met for registration.

  1. Minimum Requirements
    • A minimum of 7 shareholders and 3 directors is necessary to form a public limited company.
    • There is no limit on the maximum number of shareholders.
    • At least 1 director must be a resident of India.
    • The company must have a registered office address in India.
    • The company must have a unique name, which is not similar to any other existing company.
  2. Documentation Requirements
    • A PAN card copy of all shareholders and directors.
    • A copy of the Aadhaar card or passport of all shareholders and directors.
    • Address proof of all shareholders and directors.
    • Registered office address proof of the company.
    • Memorandum of Association & Articles of Association (AOA).
  3. Other Requirements
    • The company must obtain a Digital Signature Certificate (DSC[1]) for all directors.
    • The company must also obtain a Director Identification Number (DIN) for all directors.
    • The company must obtain a Permanent Account Number (PAN) & Tax Deduction & Collection Account Number (TAN) from the Income Tax Department.

Process for Public Limited Company Registration in India

The process for public limited company registration in India involves several steps. Let us take a look at them in detail.

Step 1: Obtain Digital Signature Certificate (DSC)

The first step in the process of public limited company registration is to obtain a Digital Signature Certificate (DSC) for all the directors of the company. The DSC is used to digitally sign the documents that are required for registration. The directors can obtain the DSC from any certified agency.

Step 2: Obtain Director Identification Number (DIN)

The next step is to obtain a Director Identification Number (DIN) for all the directors of the company. The DIN is a unique identification number that is allotted to each director of the company. The application for DIN can be made online on the MCA website.

Step 3: Name Approval

The next step is to obtain name approval for the company. The company name must be unique and not similar to any other existing company. The application for name approval can be made online on the MCA website. Once the name is approved, it is valid for 20 days.

Step 4: Memorandum of Association (MOA) and Articles of Association (AOA)

The Memorandum of Association (MOA) & Articles of Association (AOA) are the two important documents that are required for the registration of public limited company in India. The MOA contains the objectives and the scope of the company’s activities, while the AOA contains the rules and regulations that govern the company’s internal affairs.

Step 5: File for Incorporation

Once the DIN, DSC, and name approval have been obtained, the next step is to file an application for incorporation. The application can be made online on the MCA website. The application must contain the following documents:

  • MOA and AOA
  • Declaration of Compliance
  • Proof of registered office address
  • Identity & address proof of directors and shareholders

Once the application is submitted, the Registrar of Companies (ROC) will verify the documents and issue a Certificate of Incorporation if everything is in order. The Certificate of Incorporation (CoI) is a legal document that confirms the formation of the company. It contains the company’s name, registration number, and date of incorporation.

Step 6: Obtain PAN and TAN

After obtaining the Certificate of Incorporation, the next step is to obtain a Permanent Account Number (PAN) & Tax Deduction & Collection Account Number (TAN) from the Income Tax Department. The PAN is a unique identification number that is used for tax purposes, while the TAN is used for deducting and collecting taxes.

Step 7: Open a Bank Account

The final step in the process of public limited company registration is to open a bank account in the name of the company. The company must provide the Certificate of Incorporation and other relevant documents to open the bank account. It is crucial to note that the company must maintain proper books of accounts and comply with the tax regulations to avoid penalties.

Benefits of Public Limited Company Registration in India

Now that we have discussed the process of public limited company registration in India, let us take a look at the benefits of registering a public limited company.

  1. Limited Liability: A public limited company has limited liability, which means that the shareholders are only liable for the amount of their investment in the company.
  2. Large Capital Base: A public limited company can raise capital via the sale of shares to the general public, which can provide a large capital base for the company’s operations.
  3. Perpetual Existence: A public limited company has perpetual existence, which means that the company can continue to exist even if the directors or shareholders change.
  4. Credibility: A public limited company is considered to be a more credible and trustworthy business entity, which can help in attracting investors and customers.
  5. Transferability of Shares: The public limited company’s shares are freely transferable, which means that the shareholders can easily sell their shares to other investors.

Conclusion

In conclusion, the process of public limited company registration in India can seem daunting at first, but it is vital for businesses that want to expand their operations and raise capital through the sale of shares to the general public. The steps involved in registering a public limited company include obtaining a Digital Signature Certificate, Director Identification Number, choosing a company name, drafting the Memorandum and Articles of Association, filing for incorporation, obtaining a PAN and TAN, and opening a bank account.

The benefits of registering a public limited company in India are numerous, including limited liability, large capital base, perpetual existence, credibility, and transferability of shares. These advantages make public limited companies an attractive option for entrepreneurs and investors alike. However, it is crucial to comply with the tax regulations and maintain proper books of accounts to avoid penalties.

Furthermore, with the growing importance of the digital world, businesses can take advantage of online platforms to simplify the process of registering a public limited company. This not only saves time but also reduces the complexity of the registration process. In addition, it is important for businesses to stay updated on the latest legal requirements and regulations related to public limited company registration to ensure compliance and avoid legal hassles. Overall, registering a public limited company in India requires careful planning and execution. However, the benefits of registering a public limited company can far outweigh the initial investment in terms of credibility, financial stability, and growth opportunities.

Also Read: Company Registration in Uttar Pradesh – An Overview

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Shivam Narwal

Shivam Narwal, a motivated final year BBA LLB law student at Chandigarh University, has started his legal career at Swarit Advisors as a legal researcher. With a strong focus on thorough and accurate research, Shivam is dedicated to delivering exceptional results. Throughout his studies, he has shown a deep understanding of the legal system and a drive to excel in the field of Law. 

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