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Overview of Public limited Company
Overview of
Public limited Company
A Public Limited Corporation (PLC) is a type of corporate organisation that sells shares to the general public and is publicly traded on the stock exchange.It has limited liability, which means that the owners' financial liability is constrained to the amount of capital they have put in the firm. It is a separate legal entity from its owners.
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PLCs must have at least 2 director and 7 shareholders and a minimum issued capital of Rs5,00,000, and comply with more stringent reporting and regulatory requirements compared to other types of companies. They are a common option for bigger and more established firms because they can also obtain funds by offering shares to the public.
Advantages of a PLC include access to a wider pool of capital, increased credibility, and better access to credit. However, there are also disadvantages, including increased regulatory compliance and a greater degree of public scrutiny.
In conclusion, a PLC is a form of business that is publicly traded, sells shares to the public, and is held to stringent reporting and regulatory standards.
Benefit of
Public limited Company
A Public Limited Company (PLC) offers several benefits, including:
Liability protection:
The liability of partners is limited to their capital contributions, which helps to protect their personal assets from the debts and obligations of the business.
Increased credibility:
PLCs are subject to strict reporting and regulatory requirements, which can increase the credibility and transparency of the company in the eyes of investors and stakeholders..
Better access to credit:
PLCs may find it easier to obtain loans from banks and other lending institutions, as their credibility and access to capital may be viewed as a positive by lenders.
Attractive to investors:
PLCs may appeal to investors more since they have the potential for growth and allow shareholders to share in the company's success.
Separate legal entity:
PLCs have limited liability, the owners' financial responsibility is constrained to the capital they have invested in the business. This provides protection to the owners' personal assets in the event of the company's failure.
Access to a wider pool of capital:
PLCs can access a broader pool of cash by raising capital by offering shares to the general public.
Continuity of ownership:
PLCs can be purchased and sold on the stock exchange, ensuring that the business continues to be owned even if the original owners leave.
A PLC may be a desirable option for larger, more established companies seeking to obtain capital and grow their operations as a result of these advantages.
company registration in India
Document required for public limited company registration in India
The following documents are typically required for registering a Public Limited Company (PLC) in India:
DIN (Director Identification Number) for each director: Everyone who wants to serve as a director of a company in India must receive this from the Ministry of Corporate Affairs (MCA)
PAN (Permanent Account Number) for each director: This is a tax identification number issued by the Income Tax Department.
Proof of Registered Office:: This could be a rent agreement or a utility bill for the premises where the registered office of the company will be located.
Fees The Registrar of Companies (ROC) in the state where the company's registered office will be situated must receive these documents and the necessary fees. To successfully register a PLC in India, it is crucial to make sure that all necessary steps are done and all required paperwork are presented.
Eligibility criteria for registering public limited company registration in india
In India, the following eligibility criteria must be met to register a Public Limited Company (PLC):
• Minimum number of directors: A PLC must have a minimum of three directors.
• Minimum number of shareholders: A PLC must have a minimum of seven shareholders.
• Minimum paid-up capital: A PLC must have a minimum paid-up capital of 5 Lakh rupees.
• Minimum age of directors: All directors must be at least 18 years of age.
• Resident directors: A minimum of two directors must be residents of India, meaning they must have stayed in India for at least 182 days in the previous financial year.
• Business activities: The company must engage in business activities that are allowed under the Companies Act, 2013.
• DIN (Director Identification Number) for each director: This is obtained from the Ministry of Corporate Affairs (MCA) and is required for anyone who wants to be a director of a company in India.
Form to file for public limited company registration in india
To file for public limited company registration in India, you need to follow these steps:
Step 1- Obtain Director Identification Number (DIN) and Digital Signature Certificate (DSC) for all directors.
Step 2- Choose a unique company name and get it approved by the Registrar of Companies (ROC).
Step 3- Draft and file the Memorandum of Association (MoA) and Articles of Association (AoA) with the ROC.
Step 4- File the e-Form INC-7 (Application for reservation of name) and e-Form INC-22 (Notice of situation of registered office) with the ROC
Step 5- Obtain the certificate of incorporation from the ROC after compliance with all the requirements.
Step 6- Apply for PAN and TAN for the company and open a bank account.
Step 7- File e-Form INC-20A (Notice of situation or change of situation of registered office) with the ROC within 30 days of changing the registered office of the company.
PSR Compliance Assistance
The process of registering a Public Limited company involves adhering to many requirements, preparing documents, and complying with pre-incorporation and post-incorporation compliances. Moreover, complying with specific MCA mandates is imperative to avoid incurring hefty penalties and late fees. This process can seem daunting and confusing without professional assistance. PSR Team provides expert service in the online registration process of one’s company on the MCA website.
Frequently Asked Questions(FAQ's)
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01. What is a public limited company?A publicly owned business structure that enables the general public to acquire and sell shares is a public limited company. The amount of money that the owners have invested is the maximum liability.
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03. How many members are required to form a public limited company?A public limited corporation must have at least seven members in order to be formed, but there is no maximum.
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05. What is the minimum capital requirement to start a public limited company?The minimum capital requirement to start a public limited company is Rs. 5 lakhs, and the company must issue a prospectus to the public.
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07. What are the documents required for public limited company registration?The documents required for public limited company registration include PAN card of directors and shareholders, Aadhaar card or Voter ID of directors and shareholders, passport size photographs, address proof of registered office, and MOA and AOA.
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09. What is MOA and AOA?MOA stands for Memorandum of Association, which defines the company's objectives and scope of operations. AOA stands for Articles of Association, which defines the company's internal regulations and management structure.
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02. How long does it take to register a public limited company?The registration process of a public limited company usually takes around 15-20 days, subject to government processing time and document verification.
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04. Can a foreign national or NRI become a director in a public limited company?Yes, a foreign national or NRI can become a director in a public limited company after obtaining a Director Identification Number (DIN) and fulfilling the other requirements.
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06. What are the tax implications of a public limited company?A public limited business is required to pay income tax at the appropriate rate on its profits. On the dividends they get from the corporation, shareholders are required to pay taxes.
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08. What is the annual compliance requirement for a public limited company?According to the Companies Act of 2013, a public limited company must submit different yearly filing requirements, including annual returns, financial statements, and income tax returns. The holding of an Annual General Meeting (AGM) each year is additionally necessary.