COMPLETE PROCESS OF REGISTRATION OF PUBLIC LIMITED COMPANY
| DOCUMENTS | PROCESS | REQUIREMENTS
A public limited company is also a form of doing business in India. Registration of a Public Limited Company is a very complex process. Before Public Company registration one needs to ask yourself, what will be the capital, how working capital will run, will it be better to start a public company or any other form will be better than a public limited company. All necessary questions you must ask yourself before registration of a Public Limited Company as it involved higher cost and have complex rules and regulations to follow.
For registration of a Public Limited Company, there must be a minimum of 3 directors. One can start doing business with a public limited company by introducing 5 Lakhs as paid-up capital which is now optional. It enjoys all the features of a private limited company and has a more transparent structure along with creditworthiness. A public limited company can invite deposits from the general public and it can be a listed as well as an unlisted company. It has a separate legal entity just like a private limited company. In a Public Limited Company, it is easy to raise funds and expand the business. The complete process of registration of a Public Limited Company is governed by Company Act 2013 and rules made therein.
In the present article, we will discuss documents, requirements, and processes for Public Company Registration. As per the Companies Act, 2013 public limited company means a company that is not a private company. As per law, it is mandatory for all Public limited companies to add the word “public limited” at the end of its name.
ELIGIBILITY CRITERIA FOR PUBLIC COMPANY REGISTRATION
- Minimum number of people required
It is to be noted that for registration of a public limited company a minimum of 3 directors are required apart from this 7 shareholders must be there. Further, there is no cap on a maximum number of member a public limited company can have that means it can have unlimited members.
- Capital requirement
Every business needs to have the capital to start its business and also to scale its operation. Capital in business also depends upon the size of the business. As per law, there is no cap on the maximum amount of capital a public company can have however, there must be a minimum paid-up share capital of 5 lakhs in a public company. With the initiative of ease of doing of business in India, Central government has also made the mandatory introduction of paid-up share capital to optional.
- Resident Director
It is pertinent to mention here that there must be a resident director in a public limited Company and he must be having a DIN or director identification number.
CHARACTERISTICS OF PUBLIC COMPANY REGISTRATION
- LIMITED LIABILITY
This is the first among other characteristics of registration of public limited company that it has limited liability feature this means that the liability of the shareholders is limited to the amount of share being subscribed by them and no personal assets can be used or attached for any loss or the payment of any debts. This is not available in the case of partnership firms and proprietorship.
- RAISING OF ADDITIONAL CAPITAL
As the share can be offered to the general public, the public limited company has more access to additional funds that means they can raise more and more funds to boost up their working capital and scale their business.
- TRANSFERABILITY OF SHARE
The shares are freely transferable in the case of any public limited company. No prior consent of shareholders is required as compared to the private limited companies.
- HUGE GROWTH AND EXPANSION OPPORTUNITIES
As the company can raise a huge amount of funds from the market there relies on huge growth and expansion opportunities in the case of a public limited company. The same is not available in other forms of businesses.
- SEPARATE LEGAL ENTITY
A public limited company has a separate legal entity from its members. This means it can sue or can be sued in its name.
DOCUMENTS REQUIRED FOR REGISTRATION OF PUBLIC LIMITED COMPANY
|Proof of identity of proposed Directors and shareholders of the company||Aadhaar Card, Voter identity card, PAN Passport, or the driving license|
|Proof of Address of Proof of identity of proposed Director of the company||An Electricity bill, the property tax receipt, or any water bill Rent agreement.|
|Proof of Address of the company||Rent agreement along with utility bill like Electricity bill, Gas bill, telephone bill. The utility bills shall not be older than 2 months|
|Proof of identity of proposed Director of the company for Foreign Nationals||Notarized copy of the passport and for residential proof documents like bank statement or electricity (must not be older than 2 months)|
|Other documents/information||No Objection Certificate (NOC) from the owner of the property in case the premises is taken on rent. Director Identification Numbers (DINs) of all the proposed directors. Digital Signature Certificates (DSC) all the proposed directors. Memorandum of Association (MoA) as well as the Articles of Association (AoA). 2 Passport size photographs of the proposed directors of the company.|
HERE IS THE COMPLETE PROCESS OF REGISTRATION OF PUBLIC LIMITED COMPANY
Here are the steps, in brief, to be ensured for the registration of the public limited company
Step 1: Obtaining of Director Identification Number (DIN)
Step 3: Checking of name availability
Step 4: Preparation of MOA, AOA, and other documents
Step 5: Filing of forms for registration of a public limited company
Step 6: Liaisoning with the Registrar of Companies for getting the incorporation certificate
STEP 1: OBTAINING OF DIRECTOR IDENTIFICATION NUMBER (DIN)
The proposed directors need to obtain of Director Identification Number (DIN) before becoming the director in a company. As per the Companies Act, all the directors need to have a DIN before taking the position of director in a company. DIN is basically a unique 8-digit number.
STEP 2: OBTAINING OF DIGITAL SIGNATURE CERTIFICATE (DSC)
Digital Signature Certificate (DSC) plays an important role in the registration of the public limited company as all the process is online and needs to be signed. To sign all the forms DSC is mandatory.
STEP 3: CHECKING OF NAME AVAILABILITY
After obtaining of DSC and DIN name of the public companies needs to be applied and the same can be checked by filing a RUN Web Form. This form can be applied through the MCA website. Once the name is approved and the will be reserved so that nobody else can apply for it. The name should be unique as in RUN web form no second chance is given to the applicant.
STEP 4: PREPARATION OF MOA, AOA, AND OTHER DOCUMENTS
The fourth step is to prepare the documents like MOA, AOA, consent, affidavits, and others. These documents should be prepared with due consideration and the only expert needs to be approached It is to be noted that the MOA needs to be signed by at least 2 subscribers and stamped.
STEP 5: FILING OF FORMS FOR REGISTRATION OF A PUBLIC LIMITED COMPANY
Once all the documents as stated above are prepared we can move to the other step which is the preparation of the SPICe+ Form. SPICe+ Form is basically an integrated form wherein lots of services as specified below can be applied in one go.
The form has been divided into 2 parts SPICe+ Part A and SPICe+ Part B.
The first part represents details with respect to name reservation and in the second part all other details for required for registration of the public limited company
Through the aforesaid Form we can apply for DIN, registration of the public limited company, PAN, TAN, ESIC, EPFO, Professional Tax(PT) registration, GST registration, Shop & establishment registration, Trade license, MSME registration and opening of the bank account of the company
FREQUENTLY ASKED QUESTIONS (FAQS)
Ques. 1: What do you mean by the public limited company?
A public limited company means a company that is not a Private Limited Company as per company law.
Ques. 2: How many directors and shareholders should be there while registration of a public limited company?
There must be a minimum number of 3 directors and 7 shareholders.
Ques. 3: What are the requirements mentioned under the Companies Act for minimum share capital for registration of a public limited company?
One can register a public limited company with 5 lakhs capital.
Ques. 4: What is the meaning of the SPICe+ form?
Ministry of Corporate Affairs has recently introduced SPICe+ which is an integrated web-based form through which we can apply for 10 services in one go.
Ques. 5: Can a foreign national person be a director in a public limited company?
The answer is Yes, a foreign national person can be a director in a public limited company however, there must be a person who shall be a resident director in that company.
Ques. 6: What do you mean by the Limited liability feature?
Limited liability means the liability of the members are limited to the share subscribed by them and no personal assets can be attached for the payment of any debts or dues of the company. This is a very good feature as compared to partnership firms or proprietorship firms.
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