BUSINESS REGISTRATION
PUBLIC LIMITED COMPANY?
Happy businesses & Clients.
Partnered banks & Government Orgs.
India Registered
Google Ratings
Customer Satisfaction Guarantee
OVERVIEW
WHAT IS A PUBLIC LIMITED COMPANY?
A Public Limited Company (PLC) is a type of company in India owned by shareholders and has limited liability. It is a company whose shares are traded on a stock exchange, and the public can buy and sell those shares freely.
In India, a Public Limited Company must have at least three directors, seven shareholders, and a minimum share capital of Rs. 5 lakhs. It must also obtain a Certificate of Incorporation from the Registrar of Companies, and its financial statements must be audited annually.
A Public Limited Company in India is required to comply with various legal and regulatory requirements, such as holding regular board meetings, issuing annual reports, and complying with various disclosure and transparency requirements.
PLCs in India are often considered to be more reputable and trustworthy than private companies due to their transparency and accountability to shareholders and the public. They are also subject to stricter regulations, making them more attractive to investors who seek greater protection and stability for their investments.
PREREQUISITES
PREREQUISITES TO START A PUBLIC LIMITED COMPANY?
There are several prerequisites that must be me to start a Public Limited Company in India. Here are some of the key requirements:
- Number of Directors: A Public Limited Company must have at least three directors.
- Number of Shareholders: A minimum of seven shareholders are required to start a Public Limited Company. There is no maximum limit on the number of shareholders.
- Incorporation Documents: The company’s Memorandum of Association (MOA) and Articles of Association (AOA) must be drafted and filed with the Registrar of Companies (ROC).
- Digital Signature Certificate (DSC): The directors and shareholders must obtain a Digital Signature Certificate (DSC) from a certifying authority.
- Director Identification Number (DIN): The directors must obtain a unique Director Identification Number (DIN) from the Ministry of Corporate Affairs.
- Authorized Share Capital: A Public Limited Company must have a minimum authorized share capital of Rs. 5 lakhs.
- Name Approval: The proposed name of the company must be approved by the Registrar of Companies (ROC). The name should not be identical or too similar to the name of an existing company or trademark.
- PAN and TAN: The company must obtain a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department
START A PLC?
START A PUBLIC LIMITED COMPANY?
Starting a Public Limited Company in India has several advantages over other types of organizations. Here are some of the key advantages:
- Limited Liability: The liability of shareholders in a Public Limited Company is limited to the amount they have invested in the company. This means that their personal assets are not at risk if the company faces financial difficulties.
- Access to Capital: A Public Limited Company can raise capital by issuing shares to the public, which makes it easier to raise large amounts of capital. This also helps the company to expand its operations and invest in new projects.
- Transferability of Shares: The shares of a Public Limited Company can be easily bought and sold in the stock market, making it easier for shareholders to liquidate their investments.
- Separate Legal Entity: A Public Limited Company is a separate legal entity from its shareholders, which means that it can enter into contracts, sue and be sued in its own name.
- Credibility and Reputation: A Public Limited Company is subject to stricter regulations and reporting requirements, which can enhance its credibility and reputation in the eyes of investors, customers, and suppliers.
Perpetual Existence: A Public Limited Company has perpetual existence, which means that it can continue its operation even if its shareholders or directors change. - Better Management: A Public Limited Company is run by a Board of Directors, who are appointed based on their expertise and experience. This can help to improve the management and decision-making of the company.
Overall, starting a Public Limited Company in India can provide various benefits to entrepreneurs and investors, making it an attractive option for those looking to start a business or raise capital.
VS
PRIVATE LIMITED COMPANY VS PUBLIC LIMITED COMPANY
The major differences between a Private Limited Company and a Public Limited Company are listed in the following table.
Private Limited Company |
Public Limited Company |
|
|---|---|---|
|
Ownership |
Small group of shareholders |
Large number of shareholders |
|
Number of Shareholders |
Minimum 2, Maximum 200 |
Minimum 7, No Maximum limit |
|
Transfer of Shares |
Restricted |
Freely traded on stock exchange |
|
Disclosure Requirements |
Less stringent |
More stringent |
|
Minimum Share Capital |
Rs. 1 lakh |
Rs. 5 lakhs |
|
Board of Directors |
Minimum 2, Maximum 15 |
Minimum 3 |
WHY SHOULD
WHY SHOULD A PRIVATE LIMITED COMPANY GO PUBLIC IN INDIA?
A Private Limited Company may decide to go public in India for various reasons, such as:
- Raising Capital: Going public provides an opportunity to raise capital by selling shares to the public. This can be useful for financing expansion plans, investing in new projects or technologies, or paying off debt.
- Access to a Larger Investor Base: By going public, a company can tap into a larger pool of potential investors, including institutional investors like mutual funds and pension funds, who may not be able to invest in a privately held company.
- Increased Visibility: A publicly traded company has higher visibility in the market and can benefit from greater exposure to customers, suppliers, and other stakeholders. It also provides the company with increased brand recognition and credibility.
- Liquidity for Shareholders: Going public provides an exit opportunity for existing shareholders who can sell their shares on the stock exchange, providing them with liquidity.
- Attract and Retain Talent: A publicly traded company can attract and retain top talent by offering stock options and other incentives that provide a potential upside for employees.
However, it is important to note that going public also involves significant costs and regulatory requirements, and the company’s management must carefully consider whether the benefits of going public outweigh the costs and risks involved.
REGISTER YOUR PLC
REGISTER YOUR PUBLIC LIMITED COMPANY?
Starting and registering a Public Limited Company in India involves several steps. Most of the steps are similar to registering a Private Limited Company. Here is a step-by-step guide:
- Obtain Director Identification Number (DIN) and Digital Signature Certificate (DSC) for all proposed directors of the company. You can apply for DIN and DSC online through the Ministry of Corporate Affairs (MCA) website.
- Choose a unique name for your company and check its availability on the MCA Website. Once you have a name, you need to file the required documents with the Registrar of Companies (ROC)to reserve the name.
- Prepare and file the Memorandum of Association (MOA)and Articles of Association (AOA) with the ROC. The MOA specifies the main objectives and activities of the company, while the AOA contains the rules and regulations governing the internal management of the company.
- Obtain a Certificate of Incorporation from the ROC. This certificate is a proof of the formation of the company and contains the company’s name, registration number, date of incorporation, and other details.
- Apply for a Permanent Account Number (PAN) and Tax Account Number (TAN) from the Income Tax Department. These numbers are required to conduct business and file taxes.
- Register for Goods and Services Tax (GST) if your business turnover exceeds the specified limit.
- Open a Bank account in the name of the company and deposit the minimum required share capital.
Issue and allot shares to the shareholders of the company. - Register for other necessary licenses and permits as per the requirements of the business.
The process of registering a Public Limited Company in India can take anywhere from 20-30 days, depending on the processing time of the government authorities involved. It is advisable to seek the help of a professional company secretary or chartered accountant to ensure that all the legal requirements are met and the registration process is completed smoothly.
COMPLIANCES OF A PLC
COMPLIANCES OF A PUBLIC LIMITED COMPANY?
A Public Limited Company in India is required to comply with various legal and regulatory requirements to operate and conduct business.
Some of the key compliances for a Public Limited Company are:
Annual Compliances
The company must conduct Annual General Meeting (AGM) within six months from the end of the financial year and file its Annual Return with the Registrar of Companies (ROC) within 60 days from the AGM.
Board Meetings
The company must hold a minimum of four Board Meetings in a financial year with a gap of not more than 120 days between two consecutive meetings. The Board Meetings must be conducted as per the provisions of the Companies Act, 2013.
Statutory Registers and Records
The company must maintain various statutory registers and records, such as Register of Members, Register of Directors, Register of Charges, and Minutes Books of meetings, etc., as per the provisions of the Companies Act, 2013.
Compliance with Corporate Laws
The company must comply with various corporate laws such as Income Tax Act, Goods and Services Tax (GST), Foreign Exchange Management Act (FEMA), etc.
Compliance with Securities Law
A Public Limited Company must comply with various Securities Law such as Securities and Exchange Board of India (SEBI) regulations, Listing Regulations of stock exchanges, etc.
Compliances under Labour Laws
The company must comply with various labour laws such as Employees Provident Fund (EPF), Employees State Insurance (ESI), Payment of Bonus Act, Payment of Gratuity Act, etc.
Compliances under Environmental Laws
The company must comply with various environmental laws such as Water (Prevention and Control of Pollution) Act, Air (Prevention and Control of Pollution) Act, Hazardous Waste (Management and Handling) Rules, etc.
It is advisable to seek the help of a professional service provider like us (Taxkey) to ensure compliance with the above requirements, as non-compliance can lead to penalties, fines, and legal proceedings.
BUSINESSES SUITED FOR
BUSINESSES SUITED FOR A PUBLIC LIMITED COMPANY
A Public Limited Company is well-suited for businesses that require large investments, have a wide customer base, and require access to public funds to grow and expand. Some of the businesses that are well-suited for a Public Limited Company structure are:
Infrastructure companies:
Companies engaged in the construction of roads, highways, bridges, airports, and other infrastructure projects require a large amount of capital investment. A Public Limited Company structure can help these companies access public funds through the stock market.
Manufacturing companies:
Companies engaged in the manufacturing of products such as automobiles, machinery, and consumer goods require a large amount of capital investment for setting up factories, purchasing equipment, and raw materials. A Public Limited Company structure can help these companies raise funds from the public and financial institutions.
Banking and Financial Services companies:
Banking and Financial Services companies require access to public funds for lending, investing, and other activities. A Public Limited Company structure can help these companies raise funds from the public and financial institutions and expand their operations.
Telecommunications companies:
Telecommunications companies require a large amount of capital investment for setting up infrastructure and providing services. A Public Limited Company structure can help these companies raise funds from the public and expand their operations.
Information Technology companies:
Information Technology companies require a large amount of capital investment for research and development, setting up infrastructure, and providing services. A Public Limited Company structure can help these companies raise funds from the public and expand their operations.
It is important to note that a Public Limited Company structure is not suitable for all businesses, and the decision to incorporate a Public Limited Company should be based on various factors such as business objectives, growth plans, and regulatory compliance requirements.
HOW CAN TAXKEY HELP
HOW CAN TAXKEY HELP YOUR PUBLIC LIMITED COMPANY?
TAXKEY can provide valuable assistance to a Public Limited Company in the process of incorporation, compliances, and other tax-related matters.
Some of the ways in which TAXKEY can help a Public Limited Company are:
Incorporation process
TAXKEY can help a Public Limited Company in the process of incorporation by providing guidance on the various legal and regulatory requirements, preparing and filing the necessary documents with the Registrar of Companies (ROC), and obtaining necessary approvals.
Compliances
TAXKEY can help a Public Limited Company in ensuring compliance with various legal and regulatory requirements such as filing of annual returns, conducting Board Meetings and General Meetings, maintaining statutory registers and records, and complying with tax laws such as Income Tax, Goods and Services Tax (GST), etc.
Corporate restructuring
TAXKEY assists Public-Limited Companies in corporate restructuring activities such as mergers, acquisitions, and demergers, and provide tax-efficient solutions for the same.
Tax Planning and Advisory
TAXKEY can provide valuable tax planning and advisory services to a Public Limited Company to help minimize tax liabilities, maximize tax savings, and comply with tax laws.
Representation before Tax Authorities
TAXKEY can represent a Public Limited Company before tax authorities such as the Income Tax Department, Goods and Services Tax (GST) authorities, etc. in case of tax audits, assessments, and other proceedings.
Training and development
TAXKEY can provide training and development programs to the employees of a Public Limited Company on various tax-related matters such as GST compliance, tax planning, and corporate tax laws.
In summary, TAXKEY can provide valuable assistance to a Public Limited Company in the areas of incorporation, compliances, tax planning and advisory, representation before tax authorities, corporate restructuring, and training and development.
We provide expert advice for all size businesses.
Get expert financial advice and personalized consulting to grow your business. Our team of experienced professionals is committed to your success, no matter the size or stage of your enterprise. Let us help you reach your full potential.
How it works
Easy Step Process
We offer consulting services to businesses. Our experts help you achieve your financial goals.
Simplify your finances with TaxKey Accounting's seamless online platform. From registration to personalized financial plans, we're your trusted partner every step of the way.
Experience convenience with our streamlined delivery process. From order to doorstep, we ensure your items reach you swiftly and securely
Need more help?
Testimonials
Our Clients' Reviews
