Registering a public limited company offers more security and credibility than other forms of business.
To enjoy Limited liabilities, a company needs to register correctly as a public limited company.
There are various features and benefits of these companies. But before enjoying these features, the registration of a public limited company is a crucial step.
ESPECIA has offered a piece of detailed information below for everything you need to know about the registration of a public limited company. Take a look!
Understanding Public Limited Company
A public limited company is one of the best options for investors as well as businessmen who plan to spread their business operations on a large scale.
Certain requirements exist for a company to be registered as a private limited company in India.
For example, there should be at least 7 members of shareholders to start a public limited company. There is no maximum limit for shareholders in a public limited company.
A public limited company in India enjoys all corporate entities' privileges in addition to limited liability advantages.
The listing of a public limited company is done with the stock exchange. Capital is raised from the general public.
Therefore there are various government regulations for a public limited company in India and the necessity to start as a public limited company.
Various provisions are mentioned under the Companies Act 2013, under which a public limited company is registered.
The members or shareholders that are registered in a public limited company enjoy the advantages of limited liability.
These types of Companies are also permitted to raise or increase the capital from the public concerning shares.
In addition, the rules and regulations that apply to a public limited company are more strict and more rigid than a private limited company in India.
Still, Public Limited Company Registration are better to incorporate. This is because there are various benefits of private limited companies, such as easy ownership of shares, easy transferability, etc.
Procedure for Public Limited Company Registration
Here is the detailed procedure that is required to obtain registration for a public limited company.
- It is important to complete all the legal requirements, such as the number of shareholders, number of directors, minimum share capital, etc. These requirements are necessary to be completed before registration. The further public limited company registration steps are only applicable if the first step is completed.
- The second step is to obtain DIN as well as DSC for the directors of the public limited company. Only a natural person is allowed to be the director of a public limited company. A director of a public limited company can be a shareholder or not.
- To get the registration of the company known and registered office, it is important to have a proper permanent address for the company. The company's office address should be registered with the company's registrar. The official registration and address fall under the jurisdiction of the registrar of the company. To be known as the office address, it is important to correctly fill in the address in all correspondence of the business entity. The authorized capital of the public limited company determines the registration fee.
- ROC, or the registrar of a company, is responsible for approving the name of the company. It is necessary for a public limited company to and its business name with the word LIMITED. This application is circulated as the RUN form by the Ministry of Corporate Affairs. If a particular name is not available or can get rejected, it is better to offer a list of names with the company's preferences.
- Once the office address registration, as well as the company's name, has been approved, other crucial company documents, such as AoA and MoA, should be executed.
- Once the documents are prepared and executed, they should be submitted for verification to ROC.
- Once the verification is completed and ROC has registered the company, ROC generates the CIN and incorporation certificate of the public limited company.
- Once COI has been received by the company, the business or work cannot start immediately. The company also has to apply for a certificate of commencement. The business should apply for this document within 180 days of receiving COI, meaning all the representatives or subscribers have already paid the subscription money.
Public limited company registration requirements
Various provisions and regulations are mentioned in the Companies Act 2013 to register a company as a public limited company in India.
Here is the list of the main requirements you should know before registering your public limited company.
- It should have at least seven shareholders
- to form a public limited company.
- It should have at least three directors to form a public limited company.
- The minimum share capital for a company to be registered as a public limited company is 5 lakh rupees.
- When address proof and self-attested identity copies are submitted, the DSC of any of the directors is required.
- It is necessary and crucial to have DIN for the directors.
- The registration and selection for the company's name also require an application.
- The main object clause of the public limited company is also made in an application. This application will describe the main objectives of that public limited company after its registration and incorporation.
- ROC determines the registration fees that the public limited company should pay.
- These applications are submitted to the registrar of a company with other necessary documents such as form INC-22, form INC-7, DIR 12, AoA, MoA, etc.
- After the registration and approval of the company by ROC, the business entity should apply for a document known as a business commencement certificate.
Public limited company registration benefits
Here are the main benefits of registering a company as a public limited company in India.
- Management: the management and operation of a public limited company are under the board of directors. Investors directly elect the board of directors.
- Opportunities: an organization that is registered as a public limited company has numerous growth opportunities and development openings.
- Limited Liability: limited liability protection is given to the shareholders in a public limited company. In other words, in a situation of unexpected liability, the shareholders of the company would not be affected in any way.
- Transfer of Shares: one of the biggest advantages for a company to be registered as a public limited company is that a shareholder can easily transfer the shares to other legal entities. These legal entities can either be an organization or an individual, abroad or in India. According to the business needs, the director of the public limited company can also be changed.
- Multiple Avenue Funding: a public limited company is allowed to raise funds and shares from Financial institutions as well as individuals. These shares can be raised in various forms, such as debentures, preference shareholding, equity shareholding, etc.
- Legal Entity: public limited companies in India are considered as a different and separate legal entity from other shareholders. It has a unique existence. In addition, a public limited company can also have liabilities, assets, licenses, contracts, approval, bank account, pan, etc.
Annual compliance for unlisted public limited company
- According to section 173 of the company act 2013, a public limited company that is unlisted must organize at least 4 board meetings.
- Section 148 (3) with rule 6 (2), as well as rule 6 (3A) of the companies, rule 2014 states that the unlisted public limited company should also appoint an auditor. For this appointment, performance CRA 2 is required to be filled. A cost auditor's appointment should occur within 30 days of the board meeting. An auditor can also be appointed within 180 days of a fiscal year. If a vacancy for an auditor arises in the company, then it should be filed within 30 days.
- Form DPT 3 concerning rule 16 of the companies rule 2014 states that the return of deposit in unlisted public companies should be filled with ROC.
- Form MBP 1 with section 184 (1) with the Companies Act 2013 and rule 9 (1) with companies rule 2014 states that the directors of the company are required to disclose every financial interest or matter in the company.
- Rules 8, as well as a rule 8 (A) of the companies, rule 2014 and Section 203, state that the appointment of CEO, CS, or CFO should take place within 30 days from the AGM. If there is any vacancy, then it should take place within 6 months. Form DIR 12 or Form MGT 14 is filed.
- The annual general meeting should also be conducted concerning Section 96 of the Companies Act 2013.
- For the approval as well as discussion of CSR activities, the CSR committee needs to organize four meetings. These meetings should not have a gap of 120 days between two meetings. This provision is mentioned under the Companies Act 2013, secretarial standard, and companies rule 2014.
Annual compliance for listed public limited company
- The rules and regulations that SEBI mentions should be followed with the regulations of 2015.
- Section 121(1) of the Companies Act 2013 States to hold annual general meetings. After the conduction of the Annual general meeting, the form MGT 15 should be filled out.
- Section 137 of THE companies Act 2013 and Rule 12 (2) of the companies rule 2014 state that the financial statements of listed public companies should be filed. These financial statements should include an auditor report, director report, director statement, cash flow statement, balance sheet, etc. Form AOC 4 is required to fill these statements.
- Section 92 of the Companies Act 2013 and rule 11 (1) of the companies rule 2014 state that annual returns should be filed. These annual returns consist of information about shareholders as well as directors who are filed through the form MGT 7 with ROC.
- Section 173 of the Companies Act and secretarial standard 1 states that the director report and financial report should be prepared. The filing of these reports is done through MGT 14 form.
- The form ITR 6 is used to fill income tax returns. The returns should be filled before the September 30 financial year.
Private Limited Company Registration
One Person Company Registration
A public limited company enjoys various benefits, such as the limited liability of shareholders and the ability to raise finance through shares.
Also, a public limited company is recognized as a separate legal entity. But all these benefits can only be taken care of if a public limited company is registered.
The Public Limited Company Registration process can be very confusing and inconvenient if you are unaware of the necessary steps.
Here we have covered all the necessary steps, regulations, and compliance for a public limited company to register effortlessly.
Why ESPECIA For Public Limited Company Registration
ESPECIA has always come forward with a team of experience. We always believe in transparent and clear information for our clients and customers.
We are well known for our trusted surface and outstanding performance for our clients.
We also ensure the security and privacy of our customers. ESPECIA has always acknowledged legal and accounting matters and delivered the whole process and guidelines with simplicity.