Public Limited Company Incorporation

Public Limited Company

A public limited company is the legal status of any firm which has offered shares to members of the general public and in turn owns a limited amount of its own shares. A PLCs stock or company share is presented to the general public and can be purchased or claimed by any individual, either privately during the process of the initial public offering or via trades on the stock exchange market. . This tag is used in contrast to the Inc. or Ltd. that are being used in the United States and a number of other nations. PLC tag is mandatory and it is used to inform investors or any individual who wishes to deal with such a company that the firm is publicly held and in most cases; it is very large. Public limited companies can either be listed or unlisted on stock exchanges. It is up to them if they wish to be listed and if they wish not to be. They are also regulated just like other types of firms and are mandated to publish their financial reports and explain their financial health to help investors and shareholders size up the value of the stocks.

Important Points

A PLC is the legal status or designation of an LLC (Limited Liability Company) that has limited shares and liability, and offers a substantial part of its stocks to the public, thus giving it ownership of a few.
PLCs can choose to be listed or delisted on a stock exchange. Unlike other company types, PLCs are required to always publish their financial health status, plus they are held down by numerous regulations.
The highest benefit of owning a PLC or switching to a PLC status is the ability to raise capital financing by issuing shares to the general public.
PLCs are mandated to have a minimum of two directors and they’re also required to have a high level of transparency especially in accounting and auditing.
The highest benefit of owning a PLC or switching to a PLC status is the ability to raise capital financing by issuing shares to the general public.
PLCs are mandated to have a minimum of two directors and they’re also required to have a high level of transparency especially in accounting and auditing.

Procedure for Registration of a Public Limited Company

Step 1: Digital Signature Certificate (DSC)

Since the registration procedure of a company is entirely online, a digital signature will be required for filing the forms on the MCA portal. For all proposed directors as well as the subscribers of the memorandum and articles of association, DSC is compulsory.

Step 2: Director Identification Number (DIN)

It is an identification number concerning a director; it has to be procured by anyone who intends to become a director in a company. DIN of a proposed director in addition to the name and address proof has to be mentioned in the company registration form.

Step 3: Registration on the MCA Portal

A completed SPICe+ form has to be submitted on the MCA portal in order to apply for company registration. To fill the SPICe+ form and submit the required documents, the Director of a company needs to register on the MCA portal. After the registration process is completed, the director will get access to the MCA portal services which comprises filing e-forms as well as viewing public documents.

Step 4: Certificate of Incorporation

After the registration application is submitted along with the concerned documents, the Registrar of Companies will inspect the application. After the application is verified, he will issue the Certificate of Incorporation of the Public Company.

Documents Required for Incorporating a Public Limited Company

Proof of identity of all the shareholders and directors.
Proof of address of all the directors and the shareholders.
PAN number of all the shareholders and directors.
Utility bill of the proposed office i.e. proposed registered office for the company.
A NOC(No Objection Certificate) from the landlord where the office of the company will be situated.
Director Identification Number(DIN) of all the directors.
Digital Signature Certificate(DSC) of the directors.
Memorandum of Association(MOA).
Articles of association(AOA)

There are certain differences between the two, and there are specific requirements that a public limited company needs to meet.

With a PLC you need a minimum of two shareholders, but a private limited company will only need one.
There needs to be a minimum of two Directors registered within a PLC. Only one is needed for a private company.
Company accounts are required to be submitted to HMRC within 6 months of the end of the financial year. A private company is allowed 9 months for submission.
You need to have a fully-qualified Company Secretary appointed within a PLC, but a private company secretary does not need to hold qualifications.

Who Are Eligible For Public Limited Company Registration

Minimum Seven People:Minimum seven people are required to start the public limited company in India. These companies shall have minimum three directors. The same seven people can become shareholder and director of the company. However, maximum any number of people can become shareholder in the public limited company.
No Minimum Capital:Capital of the business is depending on the need of the business and statutory no minimum capital is required to start the public limited company. However, minimum authorized and subscribed share capital required for public company is Rupees five lakh.
One Resident Director:Among director, one person must be resident Indian.
Unique Name:The name of the public limited company should be unique and should not be similar to the any existing company name or trademark.

Advantages Of Public Limited Company Registration

Larger amount of capital:Public limited companies can bring more capital as compared to other form of organization. There can be unlimited number of shareholders, who can contribute to the capital of the public limited company.
Efficient management:Public limited company is more efficiently managed entities as compared to other form of organization. These have larger pool of talented people, who contribute in efficient management of public limited company.
Free transfer of shares:The shares of a public limited company are freely transferable and that too without the prior consent of other shareholders, as compared to private limited companies.
Larger Borrowing Power: Public companies are most recognized in terms of financial assistance/borrowing from banks and financial institution and also there are several financial instruments available to public limited companies, which are not available to other form of business organization.
Limited Liability of shareholder: Liability of shareholders of the public limited company are limited only up to the shares subscribed by them and should not be personally liable for the debts of the company in case company are unable to pay its liabilities.
Separate Legal Entity: Public limited company legal entity are separate than its shareholders/promoters.
Perpetual Existence: Public limited company existence will go for ever and its existence will not be effected by the death of shareholders, directors or transfer of shares to others.
Capacity to Sue and to be Sued: Public limited company can take legal action against another and also other person can take legal action against company separate from directors, shareholders & promoters.
Ownership of property: Public limited company can sale, purchase and own the property like individual.