Comprehensive Guide related to Public Limited Company (PLC) registration in India

1. Introduction

A Public Limited Company (PLC) is a corporate entity suited for large-scale businesses. It offers benefits such as separate legal entity status, limited liability, and perpetual succession. This guide covers everything about registering, managing, and complying with the regulations of a Public Limited Company in India.

2. Key Features of a Public Limited Company

• Minimum Capital Requirement: A Public Limited Company can be registered with a minimum capital of INR 5 lakh.
• Minimum Membership Requirement: Requires a minimum of three directors and seven shareholders.
• Separate Legal Entity: The company exists independently of its owners.
• Perpetual Succession: Changes in directors or shareholders do not affect the company’s existence.
• Limited Liability: Shareholders are only liable up to the amount they have invested.
• Fundraising Capability: Can raise capital through Initial Public Offering (IPO) or stock market listing.

3. Types of Public Limited Companies

3.1 Listed Public Limited Company

• Shares are traded on stock exchanges.
• Subject to strict SEBI regulations.
• Examples: Reliance Industries Ltd, Tata Steel Ltd.

3.2 Unlisted Public Limited Company

• Shares are not publicly traded.
• Less regulatory scrutiny compared to listed companies.
• Suitable for businesses that seek investments but do not want public trading.

4. Legal Framework Governing Public Limited Companies

A Public Limited Company in India is governed by the Companies Act, 2013 and regulated by:

• Ministry of Corporate Affairs (MCA)
• Securities and Exchange Board of India (SEBI) (for listed companies)
• Registrar of Companies (ROC)

5. Requirements for Registering a Public Limited Company

5.1 Minimum Criteria

• Minimum 7 shareholders (no maximum limit).
• Minimum 3 directors (each must have a Director Identification Number (DIN)).
• Authorised Share Capital: Minimum of INR 1 lakh.
• Digital Signature Certificate (DSC) for filing online documents.
• Unique Name Approval through MCA portal.

5.2 Required Documents

For Directors & Shareholders

• PAN Card
• Aadhar Card
• Address Proof (Bank statement/Utility Bill)

For Registered Office

• Proof of Address (Utility Bill/Property Papers/Rental Agreement)
• No Objection Certificate (NOC) from the owner

Additional Documents

• Memorandum of Association (MoA)
• Articles of Association (AoA)

6. Step-by-Step Public Limited Company Registration Process

Step 1: Obtain Digital Signature Certificate (DSC)

Since the registration process is entirely online, DSC is needed for document authentication.

Step 2: Apply for Director Identification Number (DIN)

DIN is a unique number required for each director, obtained via the SPICe+ form.

Step 3: Name Approval

Check availability and apply for a unique company name through MCA’s portal.

Step 4: Filing Incorporation Forms

Submit SPICe+ Form, MoA, and AoA for company incorporation.

Step 5: Obtain Certificate of Incorporation

The Registrar of Companies (ROC) issues the Certificate of Incorporation, which includes the Corporate Identification Number (CIN).

Step 6: Apply for PAN and TAN

A Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) are required for tax purposes.

Step 7: Open a Company Bank Account

Use the Certificate of Incorporation and PAN to open a bank account.

7. Compliance Requirements for a Public Limited Company

• Annual Financial Statements: Filing of Balance Sheet, Profit & Loss Account, and Cash Flow Statements.
• Annual Returns: Filing of Form MGT-7 with ROC.
• Board Meetings: Must be held every quarter.
• Statutory Audit: Conducted by a registered Chartered Accountant.
• Income Tax Returns: Mandatory annual filing.
• SEBI Compliance (For Listed Companies).

8. Advantages of a Public Limited Company

• Access to Public Funds: Can raise money by issuing shares.
• Limited Liability: Shareholders’ liability is limited to their investment.
• Perpetual Succession: Business continues regardless of ownership changes.
• Liquidity: Shares can be freely transferred (for listed companies).
• Greater Credibility: Public companies are more trusted by investors.

9. Additional Registrations

• GST Registration (for tax compliance)
• Import Export Code (IEC) (for businesses involved in international trade)
• FSSAI License (for food businesses)
• MSME Registration (for availing government benefits)
• Startup India Registration (for eligible startups)

10. Case Study: Reliance Industries Ltd

Reliance Industries started as a small textile company and later transformed into a Public Limited Company, raising significant capital via IPO. Today, it is one of India’s largest publicly traded companies with diverse business interests in petrochemicals, telecommunications, and retail.

11. Common Challenges Faced by Public Limited Companies

• Regulatory Compliance: Requires adherence to multiple laws.
• Higher Costs: Listing and compliance costs are significant.
• Risk of Takeovers: Since shares are publicly traded, hostile takeovers are a concern.
• Greater Scrutiny: Subject to SEBI and other regulatory authorities.

12. Conclusion

A Public Limited Company is ideal for businesses looking to expand and raise public funds. However, it comes with increased compliance and regulatory requirements. With expert assistance from Return Filings, you can ensure a smooth registration and compliance process for your PLC. For professional assistance, reach out to us on email: info@returnfilings.com or on whatsapp: https://wa.me/919910123091.

13. Additional Resources

• Annual Compliance Checklist for Public Limited Companies.
• Amendment in MoA and AoA: Legal Procedure to Update Company Bylaws
• Shareholders Agreement: Essential Clauses for Protecting Rights & Interests
• Removal of Director Disqualification: Legal Process to Reinstate Directorship

Frequently Asked Questions (FAQs) on Public Limited Company (PLC) registration in India

A. General Information about Public Limited Companies

1. What is a public limited company?

A public limited company is a type of company that can offer its shares to the public through a stock exchange. It has a wider shareholder base compared to a private limited company and is subject to more stringent regulations.

2. What is the difference between a public and a private limited company?

The key differences include:

2. • Share Transfer: Public companies can freely transfer shares, while private companies have restrictions.
   • Number of Shareholders: Public companies have no limit on shareholders, while private companies have a maximum of 200.
   • Public Offer of Shares: Public companies can invite the public to subscribe to their shares, while private companies cannot.
   • Regulations: Public companies face more stringent regulatory requirements and disclosures.
3. What are the types of Public Limited Companies?

Public limited companies can be broadly categorized into:

3. • Listed Companies: Companies whose shares are listed and traded on a stock exchange.
   • Unlisted Companies: Companies that have offered shares to the public but are not listed on a stock exchange.
4. What are the advantages and the disadvantages of a Public Limited Company?
   • Advantages: Access to larger capital through public offerings, enhanced credibility, greater visibility, and liquidity for shareholders.
   • Disadvantages: Higher compliance burden, increased transparency requirements, potential loss of control for promoters, and greater scrutiny.
5. How many people are required to incorporate a Public Limited Company?

A minimum of seven members and three directors are required.

B. Director Requirements and Related FAQs

6. What are the requirements to be a Director?

A director must be:

6. • An individual (not a company).
   • At least 18 years old.
   • Not disqualified under the Companies Act.
   • Possess a Director Identification Number (DIN).
   • Meet other specific criteria outlined in the Companies Act.
7. Can NRIs/Foreign Nationals be a Director in a Public Limited Company?

Yes, NRIs and foreign nationals can be directors, but certain regulations and documentation requirements apply.

8. What is the Director Identification Number (DIN)?

A unique identification number assigned to individuals who are appointed or want to be appointed as directors of any company. It is mandatory for all directors.

C. Capital and Office Requirements

9. What is the capital required to start a Limited Company (Public or Private)?

While the Companies Act, 2013, removed the minimum paid-up capital requirement, it is still advisable to have an adequate authorized capital, typically starting with Rs. 5 lakhs or more for a public limited company.

10. What is the authorized capital fee?

The fee payable to the MCA for registering the company, which varies based on the amount of authorized capital.

11. Is an office required for starting a Limited Company?

Yes, a registered office address is mandatory for a public limited company. This is the official address for all legal and communication purposes.

12. Do I have to be present in-person to incorporate a Limited Company?

No, the incorporation process is primarily online through the MCA portal. Physical presence is usually not required.

D. Incorporation Process and Timelines

13. What are the documents required for incorporation?

The documents typically include:

13. • Memorandum of Association (MoA)
    • Articles of Association (AoA)
    • Declarations from directors
    • Proof of registered office address
    • PAN and Aadhaar card copies of directors
    • Nominee consent (if applicable)
14. How long will it take to incorporate a Company?

The incorporation process usually takes a few weeks, depending on MCA processing times and completeness of documentation.

15. How long is the incorporation of the Company valid for?

The incorporation is valid indefinitely (perpetual succession) unless the company is wound up.

E. Compliance and Other Matters

16. What are the statutory compliances required for a Limited Company?

Public limited companies have numerous compliances, including:

16. • Annual filing of returns (MGT-7, AOC-4)
    • Holding Annual General Meetings (AGM)
    • Maintaining financial records
    • Conducting board meetings
    • Complying with tax regulations
    • Complying with SEBI regulations (if listed)
17. Can NRIs/ Foreigners hold shares in a Limited Company?

Yes, NRIs and foreigners can hold shares, subject to FDI guidelines and other applicable regulations.

18. What are the FDI guidelines for Foreigners in a Limited Company?

FDI in India is governed by specific regulations, including sectoral caps and approval requirements. It’s crucial to consult with professionals to ensure compliance.

F. Other generally asked questions:

19.  
How do I register a public limited company in India?

See steps outlined in company registration process

20. What is the minimum share capital for a public limited company?

No minimum paid-up capital, but adequate authorized capital is recommended

21. What are the benefits of a public limited company?

Access to capital, enhanced credibility, etc.

22. How do I find investors for my public limited company?

Through networking, investment banks, online platforms, etc.

23. What are the regulations for a listed public limited company?

SEBI regulations, listing agreements, etc.

24. How do I transfer shares in a public limited company?

Through stock exchanges or as per company procedures for unlisted companies.

25. What is a prospectus?

A document offering securities for sale to the public.

26. What is an IPO?

Initial Public Offering, when a company first offers shares to the public.

27. How do I choose a name for my public limited company?

Adhere to MCA naming guidelines and ensure uniqueness.

28. What are the tax implications for a public limited company?

As per Income Tax Act, GST Act, and various other RBI and SEBI compliances, Contact us for advice on taxation perspective of the company.

29. How do I wind up a public limited company?

Refer details in link – “Closure of Company”