What are public limited companies?

A public limited company’s definition is the answer to the question - What are Public Limited Companies? Essentially, Public Limited Companies are Corporate entities that are registered under the Indian Companies Act. They have a separate legal identity and are considered to be distinct from their owners.

 

This effectively means that a Public Limited Company is recognized by law as a separate entity from its owners and can enter into agreements under its own name. While these companies are still owned and run by their owners, they have their own separate set of rules, obligations,  regulations and legal rights.

 

The owners of a public limited company are termed as the ‘shareholders’ or ‘stakeholders’ of the company. The ownership interest of the entity is split into multiple units known as ‘shares’ or ‘equity shares.’ These units of ownership are typically held by multiple individuals or corporations.

 

Here’s a fun fact. With respect to a public limited company, the minimum number of ‘shareholders’ is 7, which effectively means that there are at least 7 different owners at any point in time. Another interesting thing is that there’s no limit on the maximum number of ‘shareholders’ for a public limited company.

 

Characteristics of a Public Limited Company (PLC)

1. Separate legal entity

A Public Company is a lawful business entity that has a separate identity from its members/shareholders.

2. Easy Transferability

A shareholder of a public limited company can easily transfer its shares to the board of the shareholders/directors is limited to the extent of the shares owned by them. In the event of any losses or debts, the shareholders are not personally liable.

3. Directors

The minimum number of Board Of Directors is 3, maximum of 12. They are elected by shareholders at the Annual General Meeting.

4. Prospectus

A prospectus can be issued to invite the public to subscribe to its shares by registering a public limited company.

5. Name

The word “LTD”, which will be added to the end of any public company’s name, will be included in the name.

 

Documents Required for Public Limited Company Registration

An applicant has to collect all these documents to file along with the incorporation application:

<> Identity Proof such as Aadhar card, PAN card, Driving License, Voter Id of all the designated directors and shareholders.

<> Address Proof of all the proposed directors and shareholder of the company.

<> PAN card details of all the directors and shareholders

<> Utility bill such as telephone, gas, water or electricity bill of the registered office as a residential proof of the business place. It should not be older than 2 months.

<> An NOC or No Objection Certificate from the landlord of the business place.

<> DSC or Digital Signature Certificate of the designated directors

<> Memorandum of Association (MOA) and Article of Association (AOA)

 

Public Limited Company Registration Procedure

 

Step 1: Apply for the Digital Signature Certificate

First of all, you have to apply for the Digital Signature Certificate for all the proposed directors in the company. DSC is used to sign the e-forms and is an authentic and safe method to file all the documents on an electronic platform. It is a mandatory document.

A director can easily obtain DSC from the nearest Certifying Authorities or CAs with self-attested coppices of their identity proof. It takes around 1 -3 working days to obtain a DSC.

 

Step 2: Name Verification

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The third step involves name registration of the company. You can check the name availability through the MCA portal by following this step

Note: The company name should not be taken or registered and should not be similar to a brand name.

 

Step 3: Filing Form SPICe+

Once the company’s name has been approved you can now file the SPICe+ form to avail the company incorporation certificate. Along with it, you have to file all the required documents such as MOA (Memorandum of Association) and AOA (Article of Association). These two documents contain the details of the mission, objectives, aims, visions, business activities, responsibilities of all the directors and shareholders and definition of the proposed company.

All the documents and applications are further verified by the higher authorities and it takes around 7 to 9 working days

 

Step 4: Obtaining Certificate of Incorporation

Once all the applications and document to have been received to the authorities and they have verified it, the company would receive the Certificate of Incorporation which will include CIN and date of incorporation.

 

Created & Posted By Sakshi Yadav

Marketing Expert at TAXAJ

TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you with a One-Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are: Launch Your Start-Up Company/Business, Trademark & Brand Registration, Digital Marketing, E-Stamp Paper Online, Closure of Business, Legal Services, Payroll Services, etc. For any further queries related to this or anything else, visits TAXAJ.

 

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