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Public Limited Company

Overview of Public Limited Company

The Companies Act, 2013 regulates the establishment and working of a public limited company. A public limited company offers shares to the general public and has limited liability. Its stock can be acquire by anyone, either privately through (IPO) initial public offering or via trades on the stock market. It is strictly regulated and is required to publish its true financial health to its shareholders.

Eligibility criteria for Public Limited Company in India

  1. Minimum 7 shareholders are require to form a public limited company.
  2. Minimum of 3 directors is require to form a public limited company.
  3. A minimum authorised share capital of Rs. 1 lakh is require.
  4. Digital signature certificate (DSC) of one of the directors is need while submitting self-attested copies of identity and address proof.
  5. Directors of the proposed company will need a DIN.
  6. The name of the company must be as per the provision of the Company Act and Rules.
  7. Documents like the Memorandum of Association (MOA), Articles of Association (AOA) and duly filled Form DIR – 12 is need.
  8. Payment of the prescribed registration fees to the ROC is require.
Characteristics of a Public Limited Company
  1. Directors – As per the provisions of the Companies Act, 2013 to start a public limited company, a minimum of 3 directors are require and there is no restriction on the maximum number of directors.
  2. Limited Liability – The liability of each shareholder is limited. In simple words, a shareholder of a public limited company isn’t personally responsible for any loss or debts of the company for any amount greater than the amount invested by them; contrary to partnerships and sole proprietorships, where the partners and business owners are jointly and severally liable for the debts of the business. However, this characteristic of a public limited company does not offer immunity to the shareholders. The shareholders will be held responsible for their own illegal actions.
  1. Paid-up Capital – A public limited company is require to have a minimum paid-up capital of Rs 5 lakh or such a higher amount as prescribed under the act.
  2. Prospectus – A prospectus is a comprehensive statement of the affairs of the company issued by a public limited company for its public and there is a requirement under the Act for public limited companies to issue a prospectus.However, there are no such provisions for Private Limited Companies. This is because private limited companies cannot invite the public to subscribe to their shares.
  3. Name – It is a compulsory requirement under the Companies Act, 2013  for all public companies to add the word ‘limited’ after their name.

Documents required to obtain an Public Limited Company

  1. Proof of identity of all the shareholders and directors
  2. Proof of address of all the directors and the shareholders
  3. PAN number of all the shareholders and directors
  4. Utility bill of the proposed office i.e. proposed registered office for the company
  5. A NOC (No Objection Certificate) from the landlord where the office of the company will be situate
  6. Director Identification Number (DIN) of all the directors
  7. Digital Signature Certificate (DSC) of the directors
  8. Memorandum of Association (MOA)
  9. Articles of association (AOA)

FAQs About Public Limited Company?

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