public limited company in india

  • In India, a Public Limited Company is a type of company that is incorporated under the Companies Act, 2013. Unlike a Private Limited Company, a Public Limited Company has more stringent regulations and is permitted to raise capital from the public by issuing shares through the stock exchanges. Here are the key features and requirements for a Public Limited Company in India:

    Key Features:

    1. Minimum Members:

      • A Public Limited Company must have a minimum of seven shareholders. There is no maximum limit on the number of shareholders.
    2. Minimum Directors:

      • It must have a minimum of three directors. At least one director should be an Indian resident.
    3. Share Capital:

      • There is no specific minimum capital requirement for a Public Limited Company in India. However, it must issue a prospectus or file a statement in lieu of a prospectus with the Registrar of Companies (RoC) before making any public offer of shares.
    4. Public Offering:

      • Public Limited Companies can issue shares to the public through an initial public offering (IPO) and subsequently list their shares on recognized stock exchanges like the BSE (Bombay Stock Exchange) or NSE (National Stock Exchange).
    5. Transferability of Shares:

      • Shares of a Public Limited Company are freely transferable, subject to compliance with the provisions of the Companies Act and the articles of association.
    6. Compliance Requirements:

      • Public Limited Companies are subject to stricter regulatory and compliance requirements compared to Private Limited Companies. This includes holding regular board meetings, annual general meetings (AGMs), and filing various statutory returns with the RoC.

    Process of Incorporation:

    1. Name Reservation:

      • Obtain approval for the proposed name of the company from the Ministry of Corporate Affairs (MCA).
    2. Digital Signature Certificate (DSC) and Director Identification Number (DIN):

      • Obtain DSC for directors and apply for DIN, if not already obtained.
    3. Drafting of Memorandum and Articles of Association:

      • Draft the Memorandum of Association (MoA) and Articles of Association (AoA) of the company.
    4. Filing of Incorporation Documents:

      • File the incorporation documents, including the MoA, AoA, and other required forms, with the RoC.
    5. Certificate of Incorporation:

      • Once the documents are verified, the RoC will issue a Certificate of Incorporation, indicating the commencement of the business.
    6. Allotment of PAN and TAN:

      • Obtain the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the company.
    7. Commencement of Business:

      • A Public Limited Company can commence its business after obtaining the Certificate of Incorporation, but it cannot issue a prospectus or make a public offer without filing a statement in lieu of a prospectus.
    8. Listing on Stock Exchanges:

      • If the company plans to offer its shares to the public, it needs to comply with the regulations of the Securities and Exchange Board of India (SEBI) and list its shares on a recognized stock exchange.

    It’s crucial to engage with professionals, such as chartered accountants and company secretaries, during the incorporation process to ensure compliance with all legal requirements. Additionally, keep in mind that the regulatory environment may change, so it’s advisable to refer to the latest regulations and guidelines from the relevant authorities.