Public Limited Company
What is Public Limited Company?
A public limited company can be understood as widely held company or publicly held company, A public limited company can be set up with minimum seven members and three directors There is no limit on maximum number of members for public limited company. These companies can give invitation to the general public to subscribe the shares of the company. Public limited companies are strictly regulated by Companies Act, 2013.. The requirement of minimum Paid up share capital of Rs 5 Lac is omitted by Government but the Authorized capital of the company should be Rs. 5 Lac and not less than that. Public limited company can either be listed or unlisted on stock exchanges.
Types of Public Limited Company
1) Company Limited by Shares: -The liability of members is limited to the amount, if any, unpaid on shares respectively held by them.2) Company Limited by Guarantee: -The liability of members is limited to the amount as the members may respectively undertake to contribute to the assets of the company at the time of its being wound up.
3) Unlimited Company: -The liability of members is unlimited i.e., if the company is insolvent or goes into liquidation the shareholders are personally liable to repay creditors.
Advantages of Public Limited Company
1) Access to more capital:-Since public limited can invite general public to subscribe for the shares hence, more capital can be raised from the public at large.2) Perpetual Succession:-The existence of company is not affected by death, bankruptcy, or insolvency of members.
3) Growth and Expansion:-The acquisition of more capital provide financial strength to the company and develops the scope of growth.
4) Shares transferability:-Shares of the company are easy transferrable if traded on stock exchanges.
5) Limited Liability:-The liability of members are limited to the amount of shares held by them.
6) Goodwill:-The company can create a good image and credibility in the market by getting its shares listed on stock exchanges.
Procedure for Incorporation of Public Limited Company
1) The first step is to obtain a Digital Signature Certificate (DSC) by all the Directors. Documents required to obtain DSC are:
- PAN Card of the Director
- Aadhar card of the Director
- Photo
- Email ID
- Contact Number
2) After obtaining DSC, the next step is to obtain the Director Identification Number (DIN) by filing form DIR-3 along with a self-attested identity proof, address proof and a photo. (If directors are more than three as DIN for up to three directors can be obtained through Spice+ Inc-32).
3) Reservation of Name:The company should get its name registered which shall be valid for 20 days from the date of approval.
4) Application for Incorporation:The company shall file application for incorporation through form INC-32 along with e-MOA, e-AOA and other required documents.
5) Certificate of Incorporation:After inspecting the application for incorporation and documents submitted, registrar of companies shall issue a Certificate of Incorporation (COI).
Documents required for Incorporation of Public Limited Company
1. Passport size photograph of all directors.
2. Self-Attested Address proof of all directors (Any One of Voter ID, Passport, Driving License, Aadhar Card)
3. Proof of office address (Any One of Electricity Bill, Telephone Bill, Property, Gas Bill, Tax Bill).
4. If Rented Business (Rent Agreement Copy) or if own (sell deed)
5. Company Name (1 to 2 Names)
6. Company object or product Name
General Compliances by Public Limited Company
1. Public Limited companies should use word ‘Limited’ with its name
2. There shall be one woman director if company is listed or having paid up share capital or turnover as prescribed
3. Board shall have one resident director.