Overview of Public Limited Company Registration in India.
Embarking on the journey of establishing a public limited company in India marks a significant milestone in your entrepreneurial endeavors. With the advent of digitalization, the process has become more accessible and streamlined than ever before. This guide aims to provide you with comprehensive content to navigate through the intricacies of online public limited company registration in India seamlessly.
Applicable rules, acts, and regulations
Applicable rules, acts, and regulations may include GDPR, FLSA, Clean Air Act, Copyright Act, ACA, Telecommunications Act, WTO agreements, FMCSR, FSMA, and various cybersecurity frameworks, depending on the industry and jurisdiction. Industries ranging from finance to healthcare must comply with an array of laws like CCPA, Securities Exchange Act, Clean Water Act, Patent Act, and WTO agreements to ensure ethical and legal operations.
A Public Limited Company is a type of business structure where the liability of the shareholders is limited to their shares’ value. It is governed by the Companies Act, 2013.
It must have a minimum of two shareholders and can have a maximum of 200 shareholders. The company’s shares cannot be publicly traded, and shares are not freely transferable without the consent of other shareholders.
Key Requirements for Private Limited Company Registration:
- Directors: Minimum two directors are required, and one of them must be a resident of India.
- Shareholders: Minimum two shareholders are needed.
- Name Reservation: The proposed name must be unique and not similar to existing companies. It should comply with the naming guidelines prescribed by the Ministry of Corporate Affairs.
- Registered Office: A physical address in India must be provided as the registered office of the company.
Procedure for Private Limited Company Registration:
- Obtain Digital Signature Certificate (DSC): Directors must obtain DSC for filing forms electronically.
- Obtain Director Identification Number (DIN): Directors need to apply for DIN from the Ministry of Corporate Affairs.
- Name Approval: Apply for the company name reservation through the RUN (Reserve Unique Name) service.
- Drafting and Filing Documents: Prepare MoA, AoA, and other necessary documents, and file them with the Registrar of Companies (RoC).
Why is it necessary to choose the right business structure in India?
- Minimum Shareholders: Unlike Private Limited Companies, which can function with a minimum of two shareholders, a Public Limited Company typically requires a higher number of shareholders. The minimum requirement for shareholders may vary depending on the jurisdiction, but it commonly ranges from seven to more.
- Minimum Directors: Similarly, PLCs usually mandate a larger board of directors compared to private companies. The minimum requirement for directors often starts from three individuals. Each director brings a diverse set of skills and expertise, contributing to effective governance and decision-making.
- Issued Share Capital: PLCs are characterized by their ability to raise capital from the public by issuing shares. To qualify for PLC registration, there’s usually a minimum requirement for the issued share capital. This amount varies across jurisdictions and is subject to change over time, reflecting economic conditions and regulatory adjustments.
- Compliance with Regulatory Standards: Public Limited Companies operate under stringent regulatory frameworks to safeguard the interests of shareholders and the public. Prospective PLCs must demonstrate compliance with all relevant regulatory standards, including financial reporting requirements, corporate governance guidelines, and disclosure obligations.
- Public Offering: A defining feature of PLCs is their ability to offer shares to the public through initial public offerings (IPOs) or subsequent equity offerings. Before embarking on the registration process, companies aspiring to become PLCs must carefully consider their readiness for a public offering, including assessing market demand, valuation, and investor appetite.
Benefits of Public Limited Company Registration in India
- Limited Liability: Shareholders’ liability is limited to the extent of their shareholding in the company. This means their personal assets are not at risk in case of company debts or legal liabilities.
- Access to Capital: Public limited companies can raise capital from the public by issuing shares through the stock exchange. This provides access to a larger pool of funds compared to private limited companies.
- Enhanced Credibility: Being a publicly traded company enhances the company’s credibility and reputation in the market. It can attract more customers, suppliers, and investors due to increased transparency and regulatory oversight.
- Easier Transfer of Ownership: Shares of public limited companies can be easily bought and sold on the stock exchange, providing liquidity to shareholders and facilitating the transfer of ownership.
- Continuity of Existence: A public limited company enjoys perpetual succession, meaning it continues to exist even if the shareholders or directors change. This ensures continuity in business operations and facilitates long-term planning.
How Register Helps in the Public Limited Company Registration Process?
Step 1: Preliminary Planning
Before diving into the registration process, undertake thorough preliminary planning. Define the company’s objectives, structure, and operational framework. This phase involves crucial decisions regarding the company’s name, location, share capital, and management structure.
Step 2: Choose a Unique Company Name
Selecting a unique and distinguishable name is essential for branding and legal purposes. Ensure that the chosen name complies with the guidelines laid out by the regulatory authorities. Conduct a name availability search to verify its uniqueness and avoid conflicts with existing entities.
Step 3: Drafting Memorandum and Articles of Association
Prepare the Memorandum and Articles of Association, which serve as the constitutional documents governing the company’s activities and internal affairs. These documents outline the company’s objectives, rights, duties, and responsibilities of shareholders and directors.
Documents Required for Public Limited Company Registration in India
Following is the list of all the vital documents for Public Limited Company Registration in India:
- Identity proof of all the Directors & Shareholders of the Company;
- Address proof of all the Directors & Shareholders of the Company;
- AOA & MOA of the Company;
- DIN and DSC of all the Directors of the Company;
- NOC or No Objection Certificate from the landlord where the office will be located;
- Latest utility bills (not more than 2 months older) of the proposed registered office of the Company.