Public Limited Company Incorporation
Public Limited Companies are companies whose shares are traded in stock market or issues fixed deposits. For Public Limited Company Registration, the company must have minimum 3 Directors, 7 Shareholders and Maximum 50 Directors and need Rs. 5 Lakhs of Paid up Capital. A Public limited company have all the advantages of Private Limited Company and the ability to have any number of members, ease in transfer of shareholding and more transparency. Public Limited Registration is done through TAXAJ.
Get your public limited company registered in the fastest possible manner.
It usually takes 7 to 10 working days.
- Name approval in RUN (Reserve your unique Name)
- DSC (3 nos)
- Filing of SPICe+ Form
- Issue of Incorporation Certificate along with PAN and TAN
- Includes Govt Fees & Stamp duty for Authorised Capital upto Rs. 1 Lakh except for the states of Punjab, Madhya Pradesh and Kerala
- Excludes foreign national / Body Corporate as director or business needing RBI/SEBI approval
- Assistance in Opening Bank Account
- Businesses looking to expand or scale operations on higher level
- Startups looking to raise capital and issue ESOPs
- Businesses looking to convert their existing firm structure into private limited company
- Businesses aiming to work globally or with reputed clients
Name approval form filing
Preparation of Incorporation Documents
Getting those docs signed by the respective stakeholders
Filing of e-Forms with ROC
Receipt of Incorporation Certificate with PAN, TAN, GST, EPF, ESI & Bank Account.
Name, Contact Number and Email Id of all the Stakeholders.
Directors Identification Number, if already.
Self Attested PAN, Aadhar & Passport size photo of all the Stakeholders.
Apostilled Passport, Mobile Bill and other KYC docs in case of NRI Stakeholder.
Latest Month Personal Bank statement of all the Stakeholders.
Specimen Signatures of all Stakeholders.
Few Proposed Business Names along with Objects.
Latest Electricity Bill/Landline Bill of Registered Office.
NOC from owner of registered office. (If Owned)
Rent Agreement from Landlord. (If Rented/Leased)
Brief description of main business activities of the proposed Company.
Shareholding pattern between the Stakeholders.
Authorised & Paid Up Share Capital of the Company.
Let us know Public Limited company in detail
As per the provisions of the Companies Act, 2013 to start a public limited company, a minimum of 3 directors are required and there is no restriction on the maximum number of directors.
The liability of each shareholder is limited. In simple words, a shareholder of a public limited company isn’t personally responsible for any loss or debts of the company for any amount greater than the amount invested by them; contrary to partnerships and sole proprietorships, where the partners and business owners are jointly and severally liable for the debts of the business. However, this characteristic of a public limited company does not offer immunity to the shareholders. The shareholders will be held responsible for their own illegal actions.
Paid up capital
A public limited company is required to have a minimum paid-up capital of Rs 5 lakh or such higher amount as prescribed under the act.
A prospectus is a comprehensive statement of the affairs of the company issued by a public limited company for its public and there is a requirement under the Act for public limited companies to issue a prospectus. However, there are no such provisions for Private Limited Companies. This is because private limited companies cannot invite the public to subscribe for their shares.
It is a compulsory requirement under the Companies Act, 2013 for all the public companies to add the word ‘limited’ after their name.
Advantages of a Public Limited company
Shares are offered to the general public at large i.e. anyone can invest in a public limited company. Hence, improves capital of the company.
Being listed on a stock market ensures that mutual funds, hedge funds and other traders take note of business of the company. This may result in better business opportunities for the Public Limited Company.
Since the shares are sold to the public at large the unsystematic risk of the market is spread out.
Growth & expansion opportunity
Due to less risk, there is a perfect opportunity for growing and expanding the business by investing in new projects from the money raised through shares.
Key point of difference between a Private Limited and Public Limited company are
a. A public limited company is a company listed on a recognised stock exchange and the stocks are traded publicly. On the other hand, a private limited company is neither listed on the stock exchange nor are they traded. It is privately held by its members only.
b. The minimum number of members required to start a public company is seven. As against this, the private limited can be started with a minimum of two members.
c. In case of a public company, it is compulsory to call a statutory general meeting of members. There is no such compulsion in case of a private company.
d. The issue of prospectus or statement is mandatory in case of public company. However, this is not the case of a private company.
e. The public company will require a certificate of commencement post incorporation to begin its operation. In contrast to this, a private company can start its business right after its incorporation.
f. The transferability of shares is restricted completely in private limited company. While the shareholders of a public company can transfer their shares freely.
g. Since there is a limited number of people and fewer restrictions, the scope of a private limited company is limited. In contrary, the scope of a public company is vast. This is because the owners of the company can raise capital from the general public and have to abide by may legal restrictions.
h. There is a greater regulatory burden on a public limited company. This is because a great amount of information has to be made available to the public who are shareholders or prospective shareholders. A lot of money has to be invested in order to prepare reports and disclosures that match with the regulations provided by SEBI.
i. A signed written resolution is received by holding general meetings of a private limited company.
j. While it mandatory for public companies to appoint a company secretary, private companies may choose to do so only at their will.
In situations where a public company wishes to return to the private limited company. This can be done by buying back all outstanding shares form the current shareholders. The company is delisted from the stock exchange, once this purchase is done. It will then return to operate as a private limited company. Recent finance Bill has further added a new clause relating to the value of assets held by private companies. According to this, prior to three years of converting a private limited company, the value of assets as detailed in the books of accounts should not exceed 5 crore rupees.
In situations where a private limited company thinks of converting into a public company, it will make the compliances easier and a company will exercise greater control. This means a company would no longer hold a meeting of shareholders and pass a special resolution regarding part related transactions. Recent trends revealed by Ministry of Corporate Affairs show a sharp increase in the number of companies that have rushed to become private entities. This has been the scenario ever since the enactment of the Companies Act, 2013.