ANNUAL COMPLIANCE OF PUBLIC LIMITED COMPANY

DEFINITION OF PUBLIC LIMITED COMPANY

As per the Company law, 2013, a public limited company is defined under Section 2(71). Public limited companies are those companies that offer shares to the general public and have limited liability. The shareholders are required to produce its financial status. The company investment is distinct from the personal finances of their members. A public limited company is authorized by the Registrar of Companies and the Ministry of Corporate Affairs.

ESSENTIALS FOR PUBLIC LIMITED COMPANY

  • The public limited company issued shares to the public to a value as may be prescribed.
  • A public limited company must be registered under company laws/act.
  • A public limited company must have a qualified company secretary.
  • They must have at least 3 directors and minimum 7 members.

ANNUAL COMPLIANCE FOR PUBLIC LIMITED COMPANY

For a public limited company, annual compliance means fulfilling the demand of the Registrar of the Company and the Ministry of Corporate Affairs. As per section 2(71) of the Company Act, 2013, it provides its shares to the public. A Subsidiary Company that complied with the public limited company is observed as a public limited company.

WHAT IS LISTED COMPANY

The listed company are those companies whose shares are dealing in the stock market. It is defined under the Section 2(52) of the Company Act, 2013. The owners of shareholders of the listed company have accepted shares to a public limited company.

For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.

BENEFITS OF PUBLIC LIMITED COMPANY

  • REPUTATION,
  • COMPLIANCE, and
  • LESS BURDEN

Reputation- A public limited company can increase its reputation in the eyes of the public by fulfills all the demands of the Ministry corporate affairs and registrar of the companies.

Compliance- There is a specified period of time for fulfilling the needs of compliance of the public limited company, after completion of the procedures a public limited company would be free from all compliances.

Less Burdens- By submitting all the requirements of authorities, a public limited company faces minimum burdens. If these compliances are not filed by the public limited company, it will face harmful damages. Therefore, it compulsory to follow all its compliances by the partners of the public limited company. 

ANNUAL RETURNS OF THE PUBLIC LIMITED-COMPANY BALANCE SHEET OF THE COMPANY

A public limited company is necessary to file audited balance sheets with the statement of profit and loss. Such compliances must be done by the public limited company within a period of 30 days of having the Annual General Meeting. Form AOC-4 is required for this procedure, and it files with the registrar of the company. The audited profit and loss statement is also submitted to the ROC and MCA.

COMPLIANCE CERTIFICATE FROM COMPANY SECRETARY

A compliance certificate is required to be taken from a company secretary if a public limited company turnover is more than INR 250 Crore and paid-up capital is INR 50 Crore. MGT-8 is provided such certificates.

REGISTRATION OF THE PUBLIC LIMITED COMPANY

A public limited company is necessary to carry a registered office for its business. This registration should be done within 30 days of its incorporation. In case a public limited company decided to change its registered office, then it compulsory to convey with Registrar of the Company and Ministry of Corporate Affairs. All registers are maintained by the registered public limited company.

HOW TO GET REGISTRATION OF MEMBERS WITH PUBLIC LIMITED COMPANY

The registration of members is done under the form MGT-1. It is mandatory for a public limited company to keep registration records of their members.

For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.

ISSUANCE OF SHARES AND DEBENTURED BY THE PUBLIC LIMITED COMPANY

Form no. MGT-2 holds a record for the issue of shares by a public limited company. A public limited company has to maintain its record.

WHAT ARE THE INFORMATION REQUIRES FOR THE MANAGEMENT OF THE COMPANY 

The management of the public limited company is handle by the directors of the company. A KYC is issued by the director for the management of the company. There is a prescribed time for submission of the KYC form.

WHAT ARE THE BASIC DOCUMENTS REQUIRED FOR FILING OF ANNUAL COMPLIANCE 

  • Incorporation Certificate;

ADVANTAGES OF PUBLIC LIMITED COMPANY RAISING CAPITAL FROM ISSUE OF SHARES

A public limited company is raised capital through public by issue of shares. An investment is doing in a public limited company is much more than a private limited company.

OPPORTUNITIES AVAILABLE FOR EXIT FROM STRATEGY

The founders can exit from the company at any point in the future as per their wishes.

RUPUTATED PROFILE

A public limited company is confident and has gained reputation if it is listed with the stock exchange market. If a public limited company has a high reputation in the eyes of the public, it helps in more investment.

EXTENSION OF PRIVAT LIMITED COMPANY

The upliftment of finance depends upon the employee of the public limited company. The public limited company can raise their funds by the way too much easier than the private limited company as the public limited company provides better terms to their investors.

TRANSFER OF SHARES

A public limited company is easily transferable of shares than a private limited company. It means shareholders get benefits from liquidity.


For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.

DISADVANTAGES OF PUBLIC LIMITED COMPANY COMPLEXITY OF REGULATORY AUTHORITY

There’s a lot of complication faced by the public limited company than a private limited company like by getting the trading certificate, in the public limited company, at least 3 directors are required at a time, but in the case of the private limited company, there is only 2 directors are required. In a public limited company getting a loan from the directors are not easy. There is mandatory to keep one general meeting in a financial year. It is important for listed companies to follow all the market rules while operating.

HIGHER DEGREE OF TRANSPARENCY IS REQUIRED

A public limited company has much higher level of transparency than a private limited company. For auditing of an account for a public limited company, they need to provide more details regarding auditing than a private limited company. The inspection of an account of the public limited company requires each and every tiny detail.

OWNERSHIP OF THE PUBLIC LIMITED COMPANY

A public limited company is difficult to control by the directors of the company or the shareholders of the company. A public limited company would not decide who are the owner. Therefore, controlling its management is difficult because conflict arises between the shareholders and the directors of the company.

SHORT TERM SURVIVAL FOR PUBLIC LIMITED COMPANY

A listed company has more pressure from the market laws. Therefore, they don’t get the chances of long-term survival in the market as they miss many opportunities. 

INITIALLY, A PUBLIC LIMITED COMPANY REQUIRES MORE INVESTMENT

The minimum financial requirement is more for a public limited company than for a private limited company. They must start with at least INR 5,00,000/- of nominal share capital, at least 25% of which is paid-up capital.

BENEFITS OF PUBLIC LIMITED COMPANY

Huge Capital- In a public limited company, there is no boundary for raising capital. A little contribution by every shareholder makes a huge capital base in the beginning.

Expansion of Opportunities- As we know, the public limited company expanded its investment at the very beginning of the business, so they attract more opportunities for expansion of business.

Democratic Management- A public limited company is an open platform for investment. Therefore, the investors of the public limited company have the right to choose their directors for managing the system of the company.

Economies of large-scale operations- A public limited company is appreciated to the economy and they deal with much more superior companies than others.

Perpetual Existence- A public limited company has a distinct legitimate character from its proprietors. It has a different lawful status. According to the law, the business entity is not quite the same as its proprietors. Insolvency or Insanity of any of the proprietors doesn’t result in the termination of the organization.

CONCLUSION

After the enactment of the Companies Act, 2013, new start-ups companies are running toward a private limited company. A public limited company is good to maintain transparency the public can directly invest in a public limited company. A shareholder is not liable for any losses.

For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.