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Public Limited Company
A public limited company (PLC) is a type of company that is publicly traded and has limited liability. It is a legal structure that allows the company to offer shares to the public, which can be bought and sold on a stock exchange. A PLC must have at least two directors and issue a prospectus before it can offer shares to the public. PLCs are subject to more regulatory requirements and public scrutiny than private limited companies. They also tend to be larger and have more shareholders than private limited companies.
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Overview of Public Limited Company
A public Limited company is a company that has limited liability & unlike the private limited company, the shares are offered to the general public. It is registered under the Companies Act, 2013. For incorporation, a minimum of 7 shareholders & 3 directors is required. The directors can also be shareholders.
- The liability of the shareholders is limited to the amount of money they have invested in the company.
- This means that if the company runs into financial difficulties, the shareholders are not personally liable for the debts of the company beyond their investment.
- PLCs are subject to more regulatory requirements than other types of companies, such as private limited companies.
- They are required to publish financial reports and hold annual general meetings where shareholders can vote on matters such as the appointment of directors and the approval of financial statements.
- Because of their ability to raise large amounts of capital by issuing shares to the public, PLCs are often larger and more established than other types of companies.
- They are also able to attract more investors and have greater access to funding sources, such as banks and financial institutions.
- Overall, the public limited company structure provides a way for businesses to grow and expand by raising capital from a large number of investors, while at the same time limiting the personal liability of shareholders.
Advantages of Public Limited Company
| Separate Legal Entity | A Public limited company is considered as a separate legal entity for the law. Accordingly, it can hold property in its name, sue & be sued, borrow in its name, etc. |
| Limited Liability | The members are considered separate from the company. So, they are not liable for the creditors of the company. |
| Improves Capital | Since, the shares can be issued to the general public, anyone can invest in a public limited company & the capital of the company gets improved. |
| Preference by Investors | It is preferred by investors as it is a well structured & transparent business structure. |
| Spread out risk | Since the shares are issued to the public, the risk in the market is spread out. |
| Transfer of Shares | In a public limited company, it is very easy to exit by just handing over the shares along with the duly signed share transfer forms. |
| Large Investment | It is a preferable business structure for a large amount of investment. |
| Expansion | Due to less risk, there is a perfect opportunity for growing & expanding the business by investing in new projects, the money raised through shares. |
Registration Process of Public Limited Company
Step 1:Â Obtaining DSC and DIN: Digital Signature Certificate(DSC) and Director Identification Number(DIN) is required for the proposed Directors of the Private Limited Company which is necessary to file the company registration documents. For this, you will only need to provide a few scanned documents and details; our representatives will fill out the form and submit it online. DIN and DSC can be obtained for the proposed Directors within 1 to 2 days.
Step 2:Â Name Approval: A minimum of one and a maximum of six proposed names must be submitted to the MCA. Subject to availability, naming guidelines and MCA processing time, Name Approval can be obtained in 2 to 3 working days.
Step 3:Â Drafting MOA and AOA Electronically: It takes 2 to 3 days to draft MOA and AOA Electronically in Spice MOA (INC-33) and Spice AOA (INC-34).
Step 4: Company Registration: After drafting the e-MOA and e-AOA, the incorporation Spice Form INC-32 is submitted along with a link form Spice MOA (INC-33) and Spice AOA (INC-34) to the MCA. MCA will usually approve the application for incorporation in 5 to 7 days, subject to their processing time. Please note that forms 49A and 49B have to be mandatorily applied with SPICe. If the same is not filed within 2 days of submitting SPICe (INC-32), the application for incorporation will be marked as ‘Invalid’.
Documents Required of Public Limited Company
1. Copy of PAN Card of directors
2. Passport size photograph of directors
3. Copy of Aadhaar Card/ Voter identity card
4. Copy of Rent agreement (If rented property)
5. Electricity/ Water bill (Business Place)
6. Copy of Property papers (If owned property)
7. Landlord NOC (Format will be provided)
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