A Public Limited Company commonly abbreviated as PLC, is a type of Limited Liability Company that offers shares to general public. Unlike a private limited company, it is mandatory to sell shares in the public domain. The stock provided by PLC can be acquired by anyone via Initial Public Offering (IPO) or by stock market trading.
Eligibility Criteria to form Public Limited Company
- Public Limited Company will need to have at least 3 directors
- Public Limited Company must have at least 7 shareholders
- All directors will need to possess a Director Identification Number (DIN)
- Public Limited Company will need to have a minimum share capital of Rs. 5 lakh
- For the selection of name of the company, an application is required
- Additional application is required to present the objective of the company
Steps to register as Public Limited Company
There are various purposes for which people get their business enterprise registered, as a Public Limited Company that include access to more capital, more public exposure and the safety it offers in terms of spreading risks and downturns.
The registration process for a public limited company is as follows:
Step 1: Applicant need to procure a form that is to be filled and submitted to register a business enterprise as public limited company. The form is available online that can be filled and submitted online
Step 2: After downloading and filling the form online, applicant needs to present a director’s Digital Signature Certificate (DSC) to proceed further towards registering a public limited company.
Step 3: Next, all details provided by applicant in the application form will be verified by the concerned authorities and the name of the company will be submitted for approval
Step 4: At this point, applicant needs to submit all the required documents to the ROC along with the payment of prescribed registration fees wherein documents required include Memorandum of Association (MoA), Article of Association (AoA) and Form DIR – 7, DIR – 12 and Form INC – 22. Make sure that all the identity and address proof documents are self-attested
Step 5: After the approval of business enterprise as a public limited company and confirmation of its unique name, company will be officially incorporated as a Public Limited Company
Step 6: Once ROC has approved and the business enterprise is incorporated as Public Limited Company, the company shall apply for ‘Certificate of Business Commencement’
- Proof of identity of all the shareholders and directors of the company i.e. Voter’s ID card, passport or driving license
- Address Proof for all the directors and shareholders of proposed public limited company that may include government-issued identity proofs carrying the permanent residential addresses of directors or shareholders
- Utility bills of public limited company’s proposed office address
- No Objection Certificate (NOC) of the landlord of applicant’s public limited company’s physical address will need to be submitted to register
- Director Identification Number (DIN) of all the directors will need to be submitted for the incorporation of public limited company
- All directors will need to submit their Digital Signature Certificates (DSC)
- Memorandum of Association (MoA) and Articles of Association (AoA) will need to be submitted for registering company
Features and Benefits
- The most obvious benefit of a public limited company is that it offers limited liability to all shareholders of the company
- Since the shares of a public limited company are offered to the general public, the company has access to more capital
- A public limited company enables the risk to be spread and distributed
- A public limited company enables quicker transfer of shares
- All the shares of a public limited company are listed in stock exchanges
Frequently Asked Questions (FAQs)
Who can be a director?
Anybody above the age of 18 years can become a director of a public limited company.
How many directors and shareholders are required to form a public limited company?
At least 3 directors and 7 shareholders are required to start a public limited company.
What is the minimum share capital required to register as a public limited company?
Minimum share capital of Rs. 5 lakh is required to register as a public limited company.
Are shareholders responsible for any loss to the company?
Shareholders are held responsible only for the amount invested by them.
Can an NRI or foreign national become a director in a public limited company in India?
Yes. An NRI or foreign national can become a director of a public limited company in India after obtaining a Director Identification Number (DIN).