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Public Limited Companies are registered and governed under the Companies Act, 2013. They must comply with provisions relating to board meetings, annual general meetings (AGM), statutory audits, filing of annual returns, and disclosure norms with the Registrar of Companies (ROC). Public companies must also follow SEBI regulations if listed on a stock exchange.
A Public Limited Company is a corporate entity that offers shares to the public and enjoys limited liability protection. It has a separate legal identity and can own property, enter contracts, sue, and be sued in its own name. With stricter compliance obligations and higher credibility, it is suitable for businesses seeking large-scale capital infusion through public investors, banks, and financial institutions.
One of the defining features of a PLC is its obligation to adhere to strict regulatory standards set by government bodies, which often include requirements for detailed financial reporting, governance practices, and transparency. This regulatory framework is designed to protect investors and promote confidence in the market. PLCs are also required to hold annual general meetings (AGMs) where shareholders can discuss company performance and future strategies, thereby promoting shareholder engagement.
Another key aspect of a PLC is the concept of limited liability, which protects shareholders from being personally liable for the company’s debts beyond their initial investment. This encourages more investors to buy shares, knowing their financial exposure is limited.
Shareholders’ liability limited to the unpaid value of shares.
Can raise funds by issuing shares to public investors.
Company exists independently of its owners and directors.
Stronger brand image with customers, suppliers, and stakeholders.
Business continues regardless of death or resignation of members.
Ability to expand operations and scale business without restrictions.
To establish a public limited company (PLC), several eligibility criteria must be met, including:
Here’s a checklist for establishing a public limited company (PLC):
Minimum Share Capital: Confirm compliance with jurisdictional minimum share capital requirements.
Company Registration: Submit registration documents, including the memorandum and articles of association, to the relevant authority.
Shareholder Requirements: Ensure the company has the minimum number of shareholders as mandated by law.
Director Appointment: Appoint the required minimum number of directors, ensuring they meet eligibility criteria.
Regulatory Compliance: Adhere to corporate governance standards and prepare for regular audits and compliance checks.
The following necessary documents are crucial for Public limited company registration in India:
Memorandum of Association: Outlines the company’s name, objectives, and scope of activities.
Articles of Association: Specifies the internal rules and regulations governing the company.
Application Form: A completed form required for company registration with the regulatory authority.
Prospectus: Provides detailed information about the company’s business, financial status, and risks for public share offerings.
Shareholder Agreements: Outline the rights and obligations of shareholders, including share transfer provisions.
Director’s Consent to Act: Written consent from each director to serve on the board.
Identification Documents: Valid ID (e.g., passport, national ID) for all directors and shareholders.
Proof of Address: Documentation verifying the registered office address of the company.
In India, public limited businesses are differentiated into different types based on share distribution and other aspects. Here are 3 different types of public ltd Companies:
These companies primarily invest in a portfolio of assets, including stocks, bonds, real estate, and other financial instruments.
These companies engage in buying and selling goods or services directly to consumers or businesses.
These companies are involved in the production of goods, either by manufacturing products in-house or assembling components sourced from suppliers.
If you’re considering the establishment or investment in a public limited company (PLC), here are several key reasons and benefits of doing so:
Share Capital:
Public Trading:
Limited Liability:
Regulatory Compliance:
Diverse Ownership:
Increased Transparency:
Professional Management:
Access to Growth Capital:
Registering a public limited company (PLC) involves several steps, which can vary depending on the jurisdiction. Here’s a general guide on how to register a PLC:
To register a Public Limited Company in India, first select a unique company name and verify it on the MCA portal. Obtain DSC and DIN for all proposed directors. Draft the Memorandum of Association (MOA) and Articles of Association (AOA). File the SPICe+ (INC-32) form with required documents to the ROC. After verification, the ROC issues the Certificate of Incorporation (COI). The company must then apply for PAN, TAN, and open a current bank account. Within 30 days, the company must hold its first Board Meeting and appoint a statutory auditor. If planning to raise funds from the public, SEBI registration and compliance are mandatory.
At least 3 directors and 7 shareholders are required.
Yes, it can issue shares and debentures to raise capital.
Minimum authorized share capital of ₹5 lakh is required.
No, listing is optional. Public companies may remain unlisted.
They are regulated by the MCA, ROC, and SEBI (if listed).
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