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Public Limited Company Meaning

A Public Limited Company or a PLC is the best business structure for those entrepreneurs who are planning big like opening an IT infrastructure, setting up of a manufacturing plant, etc. Nowadays, people mostly choose the option of a Private Limited Company over a Public Limited Company. However, it shall be pertinent to take into consideration that if in case an individual is seriously planning something big and wants to raise capital from the public by issuing them shares in return. Then, in that case, he or she must go for the option of incorporating a Public Limited Company.

A Public Limited Company enjoys all the rights and privileges of a corporate entity together with the feature of Limited Liability. Further, some of the prominent and renowned examples of a Public Limited Company are the TATA Steel Limited, Reliance Communications Limited, etc.

What is a Public Limited Company?

A Public Limited Company is registered as per provisions prescribed under the Companies Act, 2013. The member of a Public Limited Company enjoys the feature of Limited Liability. Moreover, this business structure is allowed to raise capital from the Public by issuing shares in return. 

Further, a minimum of three directors and seven members are required for the public limited company registration. The definition of a PLC is also provided under section 2(71) of the Companies Act, 2013. According to this, no minimum amount is required for the registration of a Public Limited Company.

Further, the rules and regulations of a Public Limited company are more rigid and strict in comparison to Public Limited Company. Still, it is considered as a better form of doing business than a Private Company. The reason for the same is that this business structure not only provides the benefits of a Private Company but also has features like easy transferability of shares and ownership, etc.

What is a Public Limited Company Registration?

The registration of Public Limited Company, first of all, needs a minimum composition of three directors and seven members. The features of a public limited are similar to Limited Liability with regard to its members. Also, it has the right to issue shares to the general public in order to raise capital for the company.

A subsidiary company for the purpose of a Public Limited Company Registration shall also be deemed to be a public company, even if the subsidiary company remains listed as a private company in its Articles.

Basic Features of Public Limited Company

Features of Public Limited Company

The basic feature of a Public Limited Company has been explained below:

  • Number of Directors and Members: A Minimum of three Directors and seven Members are required for the incorporation of a Public Limited Company.
  • Name of the Company: A Public Limited Company is obligated to add a “Limited” word as a suffix at the end of their name. Further, it is represented as an Identity of a Public Limited Company.
  • Separate Legal Entity: A Public Limited Company enjoys the status of a Separate Legal Entity. This means the existence of a company is different and distinct from its members.
  • Company’s Prospectus: Issuance of Prospectus is considered mandatory in the case of Public Limited Companies. The prospectus also acts as a comprehensive note with regard to the work and affairs of the company. Further, the primary aim of issuing the prospectus to the general public is to raise capital. However, a Private Limited Company has to fulfil no such compliance as it is not permitted to raise capital from the general public.
  • Paid-up Share Capital: As per the requirements of the Companies Act, 2013, no minimum amount is required for obtaining Public Limited Company Registration.
  • Limited Liability: All the members of a Public Limited Company enjoys the feature of Limited Liability. This means that the liability of a member is limited to the extent of the amount remaining unpaid on the shares subscribed.
  • Transferability of Shares: In the case of a PLC, the members are allowed to transfer the ownership of shares they are holding.

Benefits of a Public Limited Company

The advantages of a Public Limited Company are mentioned below:

  • Limited Liability: The liability of the members is limited to the extent of the amount remaining unpaid on shares.
  • Given More Preference: Banks gives more preference to a Public Limited Company when it comes to offering loans in comparison to any other business structure.
  • Transfer of Shares: Shareholders are allowed to transfer or sell their shares with ease.
  • Listing in the Recognised Stock Exchange: By following compliance, a public limited company can easily list its shares on a Recognised Stock Exchange.
  • Perpetual Succession: The existence of a Public Limited Company will not be affected by the death, retirement, insolvency, and insanity of any member, due to the feature of Perpetual Succession.
  • Improved Capital: As the general public is invited by way of prospectus to buy or subscribe to the company’s shares. Hence, subscribing to shares by the general public leads to improved capital of a Public company.
  • Fewer Risks: As a Public Limited Company is allowed to sell its shares to the public. These leads to a reduction in the scope of unsystematic risks of the market.

What are the Prerequisites to obtain a Public Limited Company Registration?

The requirement that needs to be adhered for the registration of Public Limited Company is listed below:

  • Incorporation of a Public Company requires a minimum of seven shareholders.
  • Incorporation of a Public Company requires a minimum of three directors.
  • Digital Signature Certificate (DSC) is required for at least one of the directors for signing documents electronically and digitally.
  • All the directors of a Proposed Company are required to obtain DIN (Director Identification Number) mandatorily.
  • An application consisting of the company’s main Object Clause is to be made. Further, the object clause talks in detail about what all the company will pursue after its incorporation.
  • Submission of the application to ROC (Registrar of Companies) along with the required documents like MOA, AOA.

What are the Documents needed for obtaining Public Limited Company Registration?

For obtaining registration of Public Limited Company the following documents must be provided:

  • Identity Proof in the form of PAN Card, Aadhaar card, Voter ID, Driving License of all the directors and shareholders.
  • Address Proof of all the directors and shareholders of the said company.
  • Utility bill in the form of telephone, water, gas, or electricity bill of the said registered office. This will act as a residential proof for the place being used as Registered Office. However, it must not be older than two months. 
  • A No-Objection Certificate (NOC) from the actual landlord of the place being used as Registered Office.
  • Directors Identification Number (DIR) of all the directors.
  • Digital Signature Certificate (DSC) of the directors.
  • Memorandum of Association (MOA) and Article of Association (AOA).

Procedure for Obtaining Registration of Public Limited Company

Procedure for Public Limited Company registration

The steps involved in the process of incorporating a Public Limited Company is listed below:

  • Obtain DSC and DIN: The first and foremost step is to obtain DSC (Digital Signature Certificate) for at least one director. The same is required for signing a document digitally and electronically. It is a mandatory document and is issued by the certifying authority. Further, all the directors of the proposed company are mandatorily required to obtain DIN (Director Identification Number). However, the process of obtaining DIN has now been simplified by the MCA as directors can now apply DIN by just filing the SPICe form.
  • Apply for Company’s Name: In the second step, the members of the company are required to check name availability by visiting the MCA (Ministry of Corporate Affairs) official website. After visiting the MCA portal, the next step is to select the MCA services and then check for the name availability. However, it shall be taken into consideration that the name proposed must not be the name already taken or registered.
  • Filing Form SPICe+ : Once the name proposed has been approved, the applicant is now eligible to file the SPICe+ form for availing the Certificate of Incorporation. Further, along with the form, the applicant is required to file all the documents needed, such as MOA and AOA. Further more, these two documents contain all the details regarding the mission, vision, objectives, aims, business activities, and the roles and duties of directors and shareholders together with the definition of a proposed company.
  • Obtaining Certificate of Incorporation: Once all the applications and documents submitted have been received and verified by the authorities, the company would then receive its Certificate of Incorporation, which will include its CIN (Corporate Identification Number) and the Date of Incorporation.
  • Availing PAN and TAN for the company Incorporated: Once the company has obtained its Certificate of Incorporation (COI), the members and the directors of the company can now apply for the PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) in the name of the company by filing an application to the MCA (Ministry of Corporate Affairs).
  • Open a Bank Account: With the help of PAN card details and the Certificate of Incorporation (COI), the members of the said company can now easily open a bank account in the company’s name.

Package Inclusions

  • 3 Digital Signature Certificate (DSC) and 3 Director Identification Number (DIN)
  • Company Name Reservation
  • Articles of Association (AOA) and Memorandum of Association (MOA)
  • Corporate Identification Number (CIN)
  • Company’s PAN and TAN
  • Company Agreement

FAQs for Public Limited Company

A minimum of seven shareholders and three directors are required for the Incorporation of a Public Limited Company.

A Director must be of at least 18 years of age. Further, any individual can become the director of the Public limited company, including an NRI or foreign national.

The registration process of a Public Limited Company is a 100 percent online. Therefore, neither you are needed to be physically present at our office nor the Ministry of Corporate Affairs. Moreover, we will send our person to your respective office or home address for obtaining a signature on the document.

Yes, an NRI or a Foreign National is eligible to become a Director of a Public Limited Company.

No, an individual is not required to hire a full-time CA (Charted Accountant) or CS (Company Secretary). We will provide you an Annual Compliance Package by which you will get the right and timely advice from our team.

Usually, a period of 15 business days is required by our experts for registering a Company.

The DSC is the acronym form for the Digital Signature Certificate, which is issued by the Certifying Authority, and is used to sign the documents electronically and digitally.

DIN or the Director Identification Number, is mandatorily required by every proposed director of a company.

A Public Limited Company is required to hold at least one Board Meeting in every three months. Moreover, a Public Limited Company is also obligated to conduct an Annual General Meeting (AGM) at least once every year.

The term PLC is an acronym form for the Public Limited Company.

Features

Public Limited Company

Private Limited Company

Minimum members

A minimum of seven members are required to incorporate a Public Limited Company

A minimum of two members are needed to incorporate a Private Limited Company

Minimum directors

A minimum of three directors are required to incorporate a Public Limited Company

A minimum of two directors are required to incorporate a Private Limited Company

Maximum members

Unlimited 

A maximum of two-hundred members are required to incorporate a Private Limited Company

Minimum capital

No, minimum amount is required as the Minimum Capital

No, minimum amount is required as the Minimum Capital

Invitation to Public

Yes

No

Issue of Prospectus

Yes

No

The Quorum at Annual General Meeting

Five members

Two members

Certificate for the Commencement of Business

Yes

No

Suffix used at the end of name

Limited

Private limited

Managerial Remuneration

No restriction

Cannot exceed more than 11% of the Net Profits

Statutory meeting (mandatory)

Yes, conducting a Statutory Meeting is compulsory for a Public Limited Company

No, conducting a Statutory Meeting is not compulsory for a Public Limited Company

A Public Limited Company raises its capital either by selling the shares to the already existing member or by offering new shares to the public.

The shareholders of a company are considered as the owner of the said company.

All the Directors appointed in a company have the controlling power regarding the affairs of that company.

One of the significant disadvantages annexed with the concept of a Public Limited Company is that the directors and the manager appointed to run the company may have different and distinct objectives to those of the company shareholders.

The main advantage of a Public Limited Company (PLC) is that the share capital can be raised easily from both the existing and new investors. Moreover, the Shareholders also have the right to sell their shares.

The following listed are the ways of dissolving a Public Limited Company:

  1. Voluntary Liquidation.
  2. Winding up by the Tribunal.

A minimum of two directors are required for incorporation of a Public Limited Company. However, the maximum count of the directors appointed, shall in any case, will not exceed the limit of 15 directors.

AOA stands for the Article of Association. This document defines the by-laws, rules and regulations, and the Internal Constitution of the said company.

MOA is the acronym form for the Memorandum of Association. This document showcases company’s mission, vision, and business object prior to its Incorporation.

The basic features of a Public Limited Company are listed below:

  1. Separate Legal Entity,
  2. Limited Liability,
  3. Perpetual Succession,
  4. Separate Property,
  5. Transferability of Shares,
  6. Common Seal, and
  7. Capacity to Sue and being Sued.

No, Shareholders and Directors are two very different and distinct roles within a Public Limited Company. In laymen terms, a shareholder owns the business, whereas a director runs it.

Yes, the registration process of a Public Limited Company is a 100 percent online. Therefore, neither you are required to be physically present at our office nor the Ministry of Corporate Affairs.

A Public Limited Company is qualified to issue the listed shares mentioned below:

  1. Ordinary Shares,
  2. Cumulative Preference Shares,
  3. Preferences Shares,
  4. Bearer Shares and
  5. Redeemable Shares.

Some of the prominent and renowned examples of a Public Limited company are as follows:

  1. Reliance Communications Limited,
  2. TATA Steel Limited etc.

 

It takes around 8-10 days to register a Public Limited Company, excluding the delays on the part of government authorities.

No, you can register it at your residential address too.

Yes, definitely, an NRI can be a Director, however, one of the Directors on board should be Indian.

Statutory fees is included in our package and we shall send you the detailed invoice about the fees structure.

The validity pertains to life i.e. until the company is wound up and Certificate of Registration is surrendered.

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