Public Limited Company

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Public Limited Company

The term Public Limited Company has been defined Under Section 2(71) of companies Act, 2013. As per this Act public Company means a company which is not a private company and which has minimum paid up capital of Rs.500000 or such higher paid up capital, as may be prescribed. . In India, these companies must have a minimum no of 3 directors and 7 shareholders. A maximum of 50 directors are allowed and there is no restrictions on the maximum number of shareholders. Public Limited companies are those whose securities are traded on a stock exchange and can be bought and sold by anyone.

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Advantages of Public Limited Company

Limited Liability

Limited Liability means the status of being legally responsible only to a limited amount for debts of a company. Unlike proprietorships and partnerships, in a limited liability company the liability of the members in respect of the company's debts is limited. This means any loss or debts which is purely of business nature will not impact, personal savings or wealth of an entrepreneur.

Separate Legal Entity

A limited company has its own legal identity. So third parties contract with the company and not the individual directors and shareholders. It means there is a continuity of business even if any of the shareholders die.

Tax Benefits

Sole traders and partners in a partnership pay income tax while companies pay corporation tax. While corporation tax rates are lower than income tax rates the advantage may lie with incorporation.

Raise Large Capital

Public limited company can raise large capital sum as there is no limit to the number of shareholders. These companies are able to raise capital at any time by issuing new shares. The new shares can be offered to existing shareholders or new investors, although only public limited companies can offer shares to the public.

Freely Transferable

In Public Limited Company the shares of the business are freely transferable providing more liquidity to its shareholder. Filing and signing a share transfer form and handing over the buyer of the shares along with share certificate can easily transfer shares.

Public Limited Company Registration Procedure

There are various prescribed Rules and regulation for Formation and incorporation of public limited company in India under the new Companies Act, 2013. If you prompt with your all Documents, Thestartpoint can help you in Incorporation of Public Limited Company in 14 to 15 working days, subject to Legal Processing period.

  • All of the Directors must apply for Digital Signature Certificate while submitting address proof and identity proof with self attested of the Director. You need to provide the required documents and details; our expert will fill the form Online. This process will take a days time.

  • All the proposed directors is required to obtain Director Identification Number. You need to provide all the required documents and details; our expert will fill the form Online. This process will take a days time.

  • As soon as we apply for the DSC, we will ask you for the unique name you wish to give to your Company, as well as some scanned documents regarding the proposed Company and its directors. These will be used to file SPICe INC-32 and the Memorandum of Association (MOA) and Articles of Association. At the stage, you will also need to pay Government fees for form filing and stamp duty. The Incorporation Certificate will be approved at the end of this process.

  • Every Public Limited Company needs a registered Permanent Account Number (PAN) and Tax Account Number (TAN). We will make the application online ourselves; you need to provide the all required Documents. The PAN and TAN will be couriered to your registered office address in 21 working days.

Frequently Asked Questions about Public Limited Company

For setting up a Public Limited Company anywhere in India, minimum of Seven Shareholders and Three Directors are required. The Directors can also be Shareholders. The requirement of the minimum paid-up share capital worth INR 5 Lakh, has been removed by the Companies (Amendment) Act, 2015.
Yes, NRI or Foreign National can also be a Shareholder or Director in a Public Limited Company of India. For becoming a Director,he should possess DIN issued by MCA.
There are no restrictions to maximum number of Shareholders in a Public Limited Company.
Minimum of Seven Persons are required to Incorporate a Public Limited Company.
A Public Limited Company should have minimum of 3 Directors. The Directors should be over 18 years of age. Indian and Foreign Nationals can both become Directors in Public Limited Company.
A Public Limited Company can start with minimum of Rs. 5 lakh authorised Share Capital. So paid up capital can be any amount up to Rs, 5 lakh for starting a Public Limited Company.
An address is required as Registered Office for purpose of registration with Registrar of companies. It can be Commercial / Residential / Industrial.