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Overview – public limited company registration

A public limited company is the best business structure for those who are planning big like opening IT infrastructure or manufacturing plants. An individual going for a public limited company should understand the difference between a private limited company and a public limited company.

A public limited company is a large company that is formed to raise funding from the public through IPO. These companies offer shares for the first time in IPO known as primary offerings and they can also go for secondary offerings based on their requirements. However, secondary offerings can be given only to a particular class of people known as preference shareholders.

What is a public limited company?

As per the definition given by section 2(71) of the Companies Act, 2013 a public company is an entity that does not has a meaning of a private company. Even a subsidiary of a private company is also considered a public company.

The members of a public limited company (PLC) enjoy a limited liability feature. These companies are authorized to sell their shares to the public for raising capital. The shares of such companies can be acquired by anyone through initial public offerings (IPO) or stock exchanges. The PLC has to declare its financial and company status to the general public as per law.

Documents required for public limited company registration

  • Proof of identity of all directors – PAN, Aadhaar card or voter ID
  • Passport sized photographs of all directors
  • Address proof of all directors
  • Utility bills (water, telephone, or gas bill) of the registered office place
  • NOC of registered office place from the landlord
  • Ownership document in case the office place is owned
  • Digital signature certificate (DSC) and Director Identification Number (DIN) of the designated directors
  • Memorandum of Association (MoA) and Article of Association (AoA).

Features of a public limited company

1. Number of directors and shareholders

As per the provisions of the company Act, a minimum of 3 directors and 7 shareholders are required to incorporate a public ltd company. However, the maximum number of directors is capped at 15.

2. Unique name of the company

The proposed name for the company should not match any existing companies. And all public companies must add ‘Limited’ after the company name. It is denoted as the identity of a public company.

3. Paid-up capital

As prescribed under the Companies Act a public limited company is required to have minimum paid-up capital of 5 lakh.

4. Prospectus

Public ltd companies must issue prospectus. It is issued by companies to the general public. It contains comprehensive statements of work and affairs of the company.

However, private limited companies don’t need to issue prospectus as they cannot invite the public to subscribe to their shares.

Limited liability

All the members can enjoy the limited liability feature. That means the members aren’t personally responsible for any losses of the company for any amount greater than their invested amount.

Benefits of a public limited company

  • Improved capital : In a public limited company, the general public is invited to invest in shares of the company. hence, anyone can buy the shares through IPO or share exchange and it will improve the capital of the company
  • Perpetual succession : A public limited company has perpetual succession. That means in case of death or retirement or insolvency of one or more members, the company continues to exist.
  • Better borrowing capacity : public limited companies have multiples avenues of funding. They can raise funds from individuals as well as financial institutions. This can be done via equity shareholding or debentures.
  • Easy transferability : This is one of the biggest advantages for public companies shareholders can easily transfer or sell the shares.
  • Reduced risks : As public limited companies are allowed to sell their shares to the public. The unsystematic risk of the market is spread out
  • Better opportunities for the company : Fewer risks lead to better opportunities for such companies as they can invest in new projects from the funds collected and grow readily.
  • Limited liability : The liability of the members and directors is limited only to the amount invested by them.

Procedure for public limited company registration

Step 1 - Filling the form

The application form for registration of public limited company through the official MCA portal.

Step 2 – Apply for DSC and DIN

The applicant must apply for a Digital signature certificate (DSC) and Director Identification Number (DIN) for all the proposed directors. The DSC would provide authenticity for processing the electronic documents. It is a mandatory document.

The DIN is an identification number for the directors.

Step 3 - Apply for the company’s name

In the next step, the applicant has checked the availability of the required name by visiting the MCA portal. The proposed name should not match any existing companies.

Step 4 - Filling SPICe+ from

Once the name is approved the applicant has to fill the SPICe+ form for availing the incorporation certificate. Along with that, the applicant has to file all the required documents such as MOA and AOA. These documents contain the mission, objectives, aim, duties, and responsibilities of the proposed directors.

Step5 - Obtaining incorporation certificate

After all the documents have been submitted and verified by the authorities, the company will receive its certificate of incorporation which contains the CIN (corporate identification number) and date of incorporation.

Difference between a private limited company and a public limited company

Category public limited company private limited company
Directors Minimum 3 Minimum 2
Members Minimum 7, maximum – nil Minimum 2, maximum 200
Listing Can be listed on the stock exchange No listing
Paid-up capital Minimum Rs 5lakh No minimum limit
IPO yes No
Prospectus issuance Required Not required
Certificate of commencement Yes yes
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