What is a Public Limited Company?
A Public Limited Company registration in India is the best
suitable business structure for entrepreneurs who are planning for large-scale
business operations. To register a Public Limited Company in India there should
be a minimum of seven members and there is no limit on the maximum number of
members/shareholders for starting a Public Limited Company.
A Public Limited Company in India enjoys all the privileges
of a corporate entity together with the features of Limited Liability. A public
limited company gets listed on the stock exchange to raise capital from the
general public. Hence, the Public Limited Companies have to comply with
multiple regulations of the government and start a Public Limited Company.
A Public Limited Company that is registered under the
provisions that are prescribed under the Companies Act,2013. The member of a
Limited Company registered in India enjoys the features of Limited Liability
and this type of entity is also allowed to raise capital from the public by the
issuance of shares.
Also, the rules and regulations of a Public Limited
Company are more rigid and strict in comparison to a Private Limited Company.
Still, it is better to incorporate a Public Limited Company as it provides the
benefits of a Private Limited Company with features such as easy
transferability and ownership of shares.
Procedure for obtaining Public
Limited Company registration
Step 1: It is necessary to meet all the legal requirements
such as Number of Directors, Number of shareholders, and minimum paid-up share
capital have been fulfilled. The further steps of registration will be
completed only if this step is complete.
Step 2: The next step is to obtain the DSC and DIN for the
directors of the Company. Only a natural person can be a director not any
individual or entities like the LLPs or Financial institutions. It is not
necessary for the Director to be the shareholder of the Company.
Step 3: To be recognized as a registered office it is
necessary to have a proper address of the Company. The Registered office
address has to be registered with the Registrar of Company under whose
jurisdiction the office falls. This office address is to be entered correctly
as all the correspondence related to business will be made to the registered
office address. The registration fee will be dependent on the authorized
capital of the company.
Step 4: Before the procedure of registration, the name of
the Company has to be approved by the ROC. For a Public Limited Company, the
name must end with the word "Limited". This application will be filed
in the RUN form of the Ministry of Corporate Affairs. It is better to provide a
list of names in the order of preference, in case a particular name is not
available.
Step 5: Once the name of the Company has been approved the
crucial documents of the Company that is the MoA and the AoA need to be
executed.
Step 6: Once the documents are prepared they need to be
submitted to the ROC for verification.
Step 7: Once the verification is done the ROC registers the
company and issues the incorporation certificate along with the CIN of the
Company.
Step 8: The business cannot be started immediately after receiving
the COI. The business has to apply for a certificate of commencement within 180
days of the COI stating that all the subscribers have paid the subscription
money.
Requirements for registering a Public
Limited Company
Some various rules and regulations are prescribed under the
Companies Act,2013 for the formation of a Public Limited Company in Inia. Here
is a checklist one should know of while registering a Public Limited Company:
A minimum of 7 shareholders is required to form a Public Limited
Company.
A minimum of 3 Directors is required to form a Public
Limited Company.
A minimum share capital of Rs.5 lakh is required.
DSC of one of the Directors is needed when the self-attested
identity copies and address proof are submitted.
DIN for the Directors is necessary.
Application is to be made for the selection of the Name of
the Company.
An application that comprises the main object clause of the
company is made. This object clause will define the main objectives of a
Company after the incorporation.
The application is submitted to the ROC along with the
necessary documents like MOA, AOA, a duly filled form DIR-12, Form INC 7, and
Form INC -22 is needed.
Payment of the registration fees that are prescribed by the
ROC.
Once the ROC has approved the company should apply for the
business commencement certificate.
Benefits of registering a Public
Limited Company in India
Separate Legal entity: A public limited
Company is considered to be a separate legal entity from the shareholders. The
public limited company has a perpetual existence and can have its PAN, bank
account, approvals, contracts, licenses, assets, and liabilities.
Multiple avenues of funding: A public
limited company raises funds from individuals as well as from financial
institutions. The funds may be also raised in equity shareholding, preference
shareholding, or debentures.
Easy transferability of shares: It is one
of the biggest advantages of a Public Limited Company, the shares can be easily
transferred by a shareholder to other legal entities- be it an individual or an
organization in India or abroad. The director of the company can also be
changed for ensuring the business's perpetuity.
Limited Liability: The shareholders of a
Public Limited Company are given limited liability protection. In a situation
of unexpected liability, the same would be limited only to the company and not affect the shareholders in any way.
Growth opportunities: As the organization
has a vast capital base the development openings are likewise huge,
particularly in the event of an open-constrained organization.
Management: The organization is controlled
by the Board of Directors. This Board of Directors is elected by the investors.
Annual Compliances for a Public
Limited Company
Unlisted
Company
- Board Meetings: An unlisted Public Limited
Company is required to hold at least 4 board meetings in compliance with
Section 173 of the Companies Act,2013.
- Appointment of a Cost Auditor: The auditor
is required to be appointed as per Section 148(3) along with Rule 6(2) and Rule
6(3A) of the Companies Rules,2014. For this form, CRA 2 is to be filed. It is
pertinent to mention that the original appointment of the auditor should be
done within 30 days of the Board meeting or 180 days of the financial year,
whichever is earlier. When a casual vacancy arises the same is to be filed
within 30 days.
- Return of Deposits: Returns of deposits
have to be filed with the ROC under whose jurisdiction the company falls via
Form DPT 3 in compliance with rule 16 of the Companies (Acceptance of Deposit)
Rules,2014.
- Appointment of CFO or CS or CEO: Section
203 read with Rule 8 and Rule 8A of the Companies Rules,2014 requires the
appointment of the CFO or CS or CEO within 30 days of the AGM or 6 months in
case of the casual vacancy. Form MGT 14 or Form DIR 12 are filed.
- Annual General Meeting: AGM for the
declaration of the dividend has to be conducted in compliance with Section 96
of the Companies Act, 2013.
- CSR Committee: CSR Committee has to hold
four meetings with a gap of not less than 120 days between the two meetings
held for discussion and approval of the CSR activities. This is done under the
Companies Act,2013 read with Companies Rule,2014, and Secretarial Standard.
- Director’s Disclosure: Directors are
required to disclose any financial interest in the Company via Form MBP 1 in
compliance with Section 184(1) of the Companies Act,2013 read with Rule 9(1) of
the Companies (Meetings of Board and its Powers) Rules,2014.
Listed
Company
·
Annual General Meeting: Annual General
Meeting has to be held following Section 121(1) of the Companies Act, 2013.
Form MGT-15 has to be filed once the AGM has been conducted
- Financial Statements: The Financial
Statements of the Company have to file as per Section 137 of the Companies
Act,2013, read with Rule 12(2) of the Companies (Accounts) Rule,2014. The
Financial statement consists of the balance sheets, cash flows statements,
Director's statement, Director's report, Auditor's report, and the combined
financial state, meaning which is prepared in XRBL (Extensible business
reporting system). This is filed via Form AOC 4
- Annual Return: This has to be filed
following Section 92 of the Companies Act.2013 read with Rule 11(1) of the
Companies (Management and Administration) Rules,2014. The Annual return
contains the information about the directors and shareholders and is required
to be filed in Form MGT7 with the relevant ROC.
- Financial and Director’s Report: Adoption
to the financial and director's report is to be done in consonance with Section
173 of the Companies Act read with the Secretarial standard 1. The filing is
done via form MGT 1
- Income Tax Returns: This is to be filed
with the Tax department in form ITR 6 on or before September 30th of the
financial year
- Secretarial Audit Report: Submission of the
Secretarial report is a requirement under Section 204 of the Companies Act,2013
read with Rule 9 of the Companies Rules,2014. The secretarial report has to be
submitted only when the Company's total paid-up capital is equal to or crosses
Rs. 50 crores or the annual turnover is equal to or exceeds INR 50 crores or
the annual turnover is exceeding Rs.250 crores. This filing did via Form MR 3
- Other compliances: These include the rules
and regulations that are laid down by SEBI. The listed Companies have to comply
with the regulations of 2015.
Created & Posted by Garima
Article assistant at TAXAJ
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