A Public Limited Company Registration delights the benefits of limited liabilities for its shareholders and provides all the right to sell their shares for raising the funds. Any interested investors can fund in the shares of a public limited company.
A limited company allows limited liability to its proprietors and to its management team. But in the case of a public limited company, a firm can sell shares to investors which are considered as a beneficial act in raising the capital for the business. To establish a Public Limited Company, a minimum of three Directors are required and there is no cap on the maximum number of members. Importantly, it has more strict regulatory requirements when compared to a Private Limited Company.
Public Limited Company Registration in India is a different type of company but holds most of the characteristics of a private limited company. It enjoys more benefits such as ease of transferability, borrowing capacity, limited liability, and perpetual existence. Like any other companies in India, Public Limited Company is also registered according to the rules and regulations of the Companies Act, 2013.
Advantages of Public Limited Company
Business Type For Investors
Investors and other parties prefer Public Limited companies to invest their money as it is well structured and also transparent business structure. If anyone wants to raise capital for your business and to sell the ownership in the business, this type of company is what they should consider.
Most Suitable Business For Heavy Investment
Public Limited company is the best business structure for heavy investment.
Easy To Raise Funds And Loans
Public Limited Company is like a person as it can list itself in various stock exchange markets in India and can raise capital from the stock market and from interested investors. It also enjoys wide options to raise capitals through the general public, bank loans and Institutional investors.
A Public Limited Company has ‘perpetual succession’, which means it has uninterrupted existence until it gets legally dissolved. Being a separate legal person, a company is unaffected by the departure or death of any member, it continues to be in existence regardless of the changes in the membership of the company.
Easy Transfer Of Shares
Importantly, it is very easy to way out from a Public limited company, as only shares of the company have to be handed over to the investor or purchaser along with share transfer forms.
A Public Limited Company is a juristic person; it can own, acquire, enjoy and estrange, properties in its own name. There is no right to the shareholder to make any claim upon the property which is in the name of the company so long as the public limited company is a going concern.
Checklist for registering a Public Limited Company in India
As per Company Act, 2003 any Public Limited Company to be registered in India must meet the conditions mentioned below.
- To form a public limited company a minimum of seven members is needed.
- There is no self-command on a maximum number of members.
- At least one of the directors must be an Indian Territory Resident.
- A minimum paid-up capital of around Rs 5 lakhs is required.
- The shares assigned to the members are munificently transferable.
- Public Limited Companies can raise funds or investments from the general public through open requests and invitations by selling the company’s shares and accepting funds or fixed deposits.
- The name of the public limited company should not bear any similarity or should not match any name of the company or trademark that already exists. The company name should be unique anyways.
- These types of companies are required to keep either public limited’ or private limited’ after their company names.
Documents needed for Public Limited Company Registration in India
- Documents needed for Directors and Shareholders
- PAN Card
- Foreign Nationals nationality proof.
- Passport for Foreign Nationals
- Identity proof such as Passport, Driving License, Voter ID and so on,
- Directors and Shareholders Address proof
- 2 Passport size photos
- The applicant can provide the electricity bill or phone bill or electricity bill or bank statement and importantly, none of the above mentioned documents should be older than two months.
- Rent Agreement or Conveyance attached with rent receipts.
- Latest Utility bills
- NOC provided by Landlord