A Public Limited Company is a company that sells its shares to the general public which is then traded in the stock market. In India, these business entities and their working are regulated by the Companies Act 2013 and they must get themselves registered with the Registrar of Companies. A PLC has limited liability and its stocks can be obtained by anyone by trades on a stock market or privately via an Initial Public Offering (IPO). They work under compliance with strict governance rules and are required to reveal their true financial health in order to protect shareholder’s interests.
Advantages of a Public Limited Company in India
Some of the key advantages of Public limited company formation are discussed below:
- The company is capable of raising capital via share sales.
- Expansion of funds can be done by the raised capital along with new opportunities.
- An individual can use the capital to pay off debts.
- The publicity raises brand awareness.
- When a company is listed on the stock market, it can boost its reputation and prestige.
- It is easier for businesses to attract partners due to public records.
- Bringing transparency improves the perception of customers towards brands.
There are businesses that exist private for their whole lifetime while some may eventually become public. Nowadays, various companies become public limited companies and are well established. They have a solid management structure and function so well that they are capable enough of tackling potential risks that occur after going public.
Understanding of Public Limited Company in India
In India, a Public Limited Company is a business entity that is owned and run by its owners but they still remain public and have separate rules, regulations, obligations and legal rights. These are governed by the Companies Act 2013 and have minimum capital and limited liability. The owners of a PLC are called as stakeholders or shareholders of the company. Usually, the ownership of the company is divided into multiple units and is called equity shares. A company can have at least seven shareholders and may have different owners at different points of time, but there is no maximum limit for the same.
In India, a Public Limited Company can either get registered or remain unregistered in the share market and it completely depends on them. When listed in the stock market, they are required to present their financial year reports and provide data about their economic conditions so as to gain the trust of the investors and public trust.
Public Limited Company Registration Process in India
Registering a company as a Public Limited Company is done by registering themselves by the Registrar of Companies. The registration of a Public Limited Company can be done by following the steps listed below:
- Obtaining a DSC (Digital Signature Certificate) for filing online forms on the MCA portal.
- Obtaining a DIN (Director Identification Number) by every proposed director of the company.
- Checking and reserving availability of Company Name.
- Filing SPICe+ Form online on the MCA portal for company registration.
- Certificate of Incorporation
- Applying for TAN and PAN
- Opening a separate bank account in the company’s name
Public Limited Company Documents Required in India
In order to successfully register a Public Limited Company in India, the following documents are required:
- Id proofs of shareholders like Voter IDs, Aadhar cards or PAN cards of all the administrators and shareholders for their identification.
- Address proofs of all the directors as well as all the shareholders are required.
- To cope with enterprise office deals is needed. For this, the ultra-modern software invoice (now not older than two months) confirming the place of the business premises or the enterprise office may be submitted.
- A consent letter from the landlord of the commercial enterprise premises granting permission for the enterprise to operate from that location is needed.
- A virtual Signature certificate is required in order to authenticate files digitally.
- Foundational documents including the AoA (Article of association) and MoA (Memorandum of affiliation) also are required.
Public Limited Company Registration Process
The following steps must be followed to register a Public Limited Company:
- Acquiring a DSC (virtual Signature certificates): the first step is to acquire a DSC for all proposed directors and subscribers. A DSC is required to fill out a web shape on the official Ministry of company Affairs (MCA) website.
- Acquiring a DIN (Director identity range): every director has to apply for and gain a DIN by way of filing the SPICe form as it simplifies the process of utility. A man or woman requires id evidence and deals with proof to apply for a DIN.
- Checking for availability of enterprise calls: a completely unique company name has to be decided on and one must ensure that the selected call is already now not in use and does not fringe on any already current emblems. This could be checked on line inside the MCA portal.
- Submitting SPICe+ form: After the name approval, the subsequent step is to document the SPICe+ form which covers all the legalities for company incorporation. whilst filing the SPICe+ shape, AoA (Article of association) and MoA (Memorandum of affiliation) also ought to be submitted.
- Receiving Incorporation certificate: The utility is reviewed through the Registrar of organizations (ROC) as soon as after the submission of the SPICe+ shape in conjunction with the essential files. Once it gets verified, a certificate of Incorporation is issued via the ROC.
- Making use of TAN and PAN: After acquiring an Incorporation certificate, software for acquiring a Tax Deduction and collection Account number(TAN) and everlasting Account variety (PAN) must be achieved.
- Opening a separate bank account in the company’s name: The subsequent step is to use it for a separate financial institution account in the corporation’s name for which the Incorporation certificates, PAN, MoA, AoA and different relevant files are required.
Conclusion
Public Limited Companies are those companies that have limited liability and sell shares to the public which are traded in the stock market. The companies can either remain registered public or remain unregistered and it is completely their choice. These companies have a minimum of seven shareholders and even after being owned by individuals, they still have separate sets of rules and regulations. Being registered as a Public Limited Company is advantageous in many ways and it brings transparency that helps in gaining the trust of its investors and shareholders. Public Limited Company registration is done by the Registrar of Companies and necessary steps are followed for their registration.
FAQs
- What is a Public Limited Company?
A Public confined enterprise is an enterprise that sells its stocks to most people that’s then traded within the stock marketplace.
- What is the liability of a Public Limited Company?
A PLC has restricted legal responsibility and its stocks may be received with the aid of everybody by way of trades on a stock marketplace or privately through an initial Public supplying (IPO). They work underneath compliance with strict governance regulations and are required to expose their authentic monetary health with a purpose to protect shareholder’s interests.
- What is the significance of the SPCIe form?
SPICe+ form covers all the legalities for company incorporation. At the same time as submitting the SPICe+ Form, AoA and MoA also ought to be submitted.
- Who are considered as the owners of Public Limited Company?
The owners PLC are referred to as stakeholders or shareholders of the company. Generally, the ownership of the company is split into multiple gadgets and is called equity stocks.
- How to acquire DIN (Director Identification Number)?
DIN (Director Identification Number): Each director must apply for and obtain a DIN by filing the SPICe form as it simplifies the process of application. An individual requires ID proof and address proof to apply for a DIN.
