Introduction of Process of Public Limited Company Registration
A public limited company is a corporate entity that is publicly listed on the stock exchange and offers shares to the general public. The provisions promulgated by the Companies Act, 2013 in India, in the Process of Public Limited Company Registration, should comprise of at least seven shareholders and have the privilege to raise capital by issuing shares and debentures to the public. The shareholders in a Public Limited Company are warned of their liability as the extent of their shareholding in the company only. These businesses are regulated to adhere to strict legal requirements, thereby, they must appoint independent directors, conduct annual general meetings, and show financial data to the public. Meanwhile, public limited companies have been able to attract large amounts of financing from the public and have the strength of stock market liquidity. In this write-up, we will focus on the requirements, advantages, documents and the process of Public Limited Company Registration.
Requirements in Public Limited Company Registration
The requirements in the Process of Public Limited Company Registration are as follows:
- Minimum Requirements: For a Private Limited Company, the number of shareholders and directors needs to be seven and three respectively, and the registered office address must be statutory.
- Share Capital: On the other hand, no minimum capital requirement has been set for a Public Limited Company, and the company should be authorized to issue shares to the public. Although, there is a set subscribed and paid-up capital mandatory.
- Compliance with the Companies Act, 2013: The procedure for incorporating a Public Limited Company must follow the rules and regulations incorporated in the Companies Act, 2013, which includes having the Annual General Meeting, maintaining the statutory registers, and filing the annual financial statements with the Registrar of Companies.
- Appointment of Directors: At least one-third of the directors of a Public Limited Company must be independent directors, as prescribed by the regulations envisaged in the Companies Act, 2013.
- Statutory Compliance: Public Limited Company follows the Statutory Compliance Requirements of obtaining a Permanent Account Number (PAN), tax deduction and Collection Account Number (TAN), Goods and Services Tax (GST) Registration and any other applicable Licenses and Permits.
- Publication of Financial Statements: One of the main characteristics of Public Limited Companies is the requirement to publish financial statements, including the balance sheets, the profit and loss accounts, the auditor’s reports, and other relevant documents. They must then be available for public analysis.
- Continuous Reporting: Public limited companies must disclose their performance to investors and the public regularly by way of quarterly financial results, shareholding patterns, and any material changes that have a bearing on the company.
Advantages of Public Limited Company Registration
Registering a Public Limited Company offers several advantages, including:
- Limited Liability: Shareholders have limited liability because their assets are not compromised by the company’s debt and obligations. Their liability is limited to the price of the shareholding that they have in the company.
- Access to Capital: Companies with Public Limited Company status can be funded by issuing shares as a form of capital through the stock exchange. This enables easy access to mass capital for business development and growth.
- Transferability of Shares: The shares of also a Public Limited Company can be easily traded on the stock exchange, which gives liquidity to the shareholders and attracts potential investors.
- Credibility and Prestige: Public Limited Companies tend to be more credible and reliable because this type of company is obliged to submit to strict judicial procedures by law.
- Separate Legal Entity: The Public Limited Company has a separate legal entity from its shareholders. This provides the company with a continuing lifetime even if the owners change or management differs.
- Professional Management: Public Limited Companies can use their competitive advantage by getting skilled professionals and efficient people as their managers. This is in turn beneficial in improving corporate governance and overall business performance.
Documents Required for Public Limited Company Registration
In the Process of Public Limited Company Registration, the following documents are required:
- Memorandum of Association
- Articles of Association
- Declaration of the Director
- Consent of Directors
- Identity Proof of Directors (e.g., Aadhar Card, Passport)
- Address Proof of Directors (e.g., Driving License, Voter ID)
- PAN Card of Directors
- Passport-sized photographs of Directors
- Proof of Registered Office Address
- NOC from the owner of the registered office
- Board Resolution for Authorization
- Declaration of Compliance
- Declaration of non-conviction
- Power of Attorney (if applicable)
- Form DIR-2 for Resident Directors
Procedure for Public Limited Company Registration
The Process of Public Limited Company Registration in India under the Companies Act, 2013 involves several steps as follows:
- Obtain the proposed director’s Director Identification Number (DIN) and Digital Signature Certificate (DSC).
- Name Approval must be applied for by following the prescribed format and attaching the proposed company name to the Registrar of Companies (ROC).
- Draft Memorandum and Articles of Association for the company.
- Complete incorporation documents enclosing MoA, AoA, and other essential documents with the ROC.
- You should pay the prescribed registration fees that go with the authorized capital of the company.
- Upon successful verification and approval of all documents by the ROC, obtain a Certificate of Incorporation.
- Obtain PAN and TAN of the business.
- Distribute and assign the shares to the shareholders.
- Obtain the licenses and registrations as required by the business operations.
- Maintain the post-incorporation formalities, including opening a bank account, keeping statutory records, and conducting board meetings.
Conclusion
The process of Process of Public Limited Company Registration under the Companies Act, 2013 follows a designed legal process which involves discharging all the statutory obligations and submitting the necessary documents to the Registrar of Companies. The process of getting Director Identification Numbers and Digital Signature Certificates as well as in finalizing Memorandum of Association and Articles of Association is essential in the creation of a Public Limited Company. The company must follow regulatory procedures, agree with corporate governance norms, and be transparent in its operations for a successful public limited company registration and operation in the process of Public Limited Company Registration. Consulting with professionals like the Company Secretaries or the legal advisors would serve as a top quality for a seamless registration process and help in the navigation of complexities of company law. Registration is a major step that building up a Public Limited Company to operate as a standard, legally compliant entity and it is also a step required for engaging stakeholders, and as a measure to contribute to the economy in compliance with the corporate laws in India. It is recommended to consult with a professional before the Public Limited Company Registration so that there are no legal consequences faced by the company by the company later.
