What is a Public Limited Company Registration
If it is a small-scale business activity, we can utilise the fund available from our savings or pledge some gold and can start the business activity. If your business idea involves money beyond your savings or affordability, we can look for some partners who can invest. But if it requires huge investment, we can look for public investment, which is possible through a public limited company.
What is a Public Limited Company?
A Public Limited Company is a separate legal entity which offers its shares to the public through the stock exchange. This type of company enjoys the privilege of limited liabilities and this would be more suitable for medium and large-scale businesses. Just like other companies, a Public Limited Company is also registered as per the rules and regulations of the Companies Act, 2013.
What are the Requirements for Public Limited Company Registering
- Minimum 7 shareholders
- Minimum 3 directors
- Minimum of 5 lakhs of share capital
- Office space
Public Limited Company Advantages and Disadvantages
Large investment: The Capital requirement of the public limited company can be raised by way of selling the shares in public through the stock exchange. So public limited company is more suitable for large-scale businesses
Limited Liability: Many times businesses need to borrow money and take some high level of risk. In case of any loss or damage, the shareholder’s risk is limited to its share value
Improved Capital Of The Company: In a public limited company, the general public is invited to buy the shares of the company. Therefore, anyone can invest in a public company that improves the capital of the proposed company.
Fewer Risks: Since public companies can sell their shares to the public, it lessens the scope of unsystematic risks in the market.
Listing in stock exchange: The shares of a public limited company can be bought or sold in seconds on the stock exchange market. Thus, making it convenient for the investors and shareholders to acquire a part of the company.
High Credibility: Investors perceive a public limited company as more reliable and trustworthy, increasing its credibility.
Can NRI be a Director?
Yes, an NRI or foreign national can be a director in a Public Limited Company after obtaining a Director Identification Number. However, at least one Director on the Board of Directors must be a Resident of India.
How to choose the name for Public Limited Company Registration?
The company name is the most important part of registration & hence should be selected with great care. Here is the name format
ABC (Prefix) + Technologies (mid name) + Limited (sufix)
# ABC – Prefix: The prefix should reflect your brand name and should be unique. I.e. no it should not match with any existing company or trademark. An example of a prefix i.e. your first word is TATA, Reliance, Hubco etc.
# Technologies – mid name: It is regarded as the second word of your company name. This should reflect your main proposed business. E.g., if you are into a technology company, then write technology, for the steel business, you can use TATA Steel Ltd.
# Limited – sufix: The last word must end with “Limited”. This word indicates that the company is not private and limited means capital is limited.
Public Limited Company Registration Documents
- Address proof of all the shareholders
- Pan card of all the shareholders
- Passport size photo of all the shareholders
- Lastest savings bank account statement of all the shareholders
- Rental deed for the office premises
- EB receipt of the office premises
What is public limited company Registration process
Step 1: Name Approval
Before filing the registration application, name recognition provided by ROC is essential. The important thing to remember is that the name must be unique.
Step 2: Apply For The Digital Signature Certificate
Digital Signature is a digital code used to sign a digital form. Registering a Public Limited Company is an online process, so signing the form on the MCA portal is only possible with a digital signature. It is also used for filing income tax returns.
Step 3: Apply For DIN
The full form of DIN is Director Identification Number. DIN is mandatory for all the directors. Government introduces DIN to prevent fraudulent activities. A person can obtain only one DIN and with this DIN, he will be the director of twenty companies.
Step 4: Filing of documents
After obtaining all the above-mentioned documents. The company director needs to log in to the MCA portal to fill out the form. Fill up all the details correctly and submit the required documents without fail.
Step 5: Certificate of incorporation
After examining the application, the Registrar of companies will issue the certificate of incorporation.
So by now, you are clear about registering a Public Limited Company. To know more about Business and Registrations, follow us.