Public Limited Company Registration

Overview

A Public Limited Company is popularly followed in India. It is ideal for businesses aiming for large-scale operations and public investments. It offers benefits like limited liability, easy share transferability, and the ability to raise capital from the public through stock exchanges. Public Limited Company Registration in India positions your business for significant growth opportunities, regulatory credibility, and access to various funding options, including from international investors.

Benefits of Public Limited Company Registration

A public limited company registration holds several distinct benefits that make it an appealing choice for entrepreneurs and investors in India. Here are some key benefits of opting for a public limited company structure:

1. Access to Capital: One of the primary advantages of a public limited company is its ability to raise substantial capital by issuing shares to the general public. This capital infusion can be used to fund expansion, research and development, infrastructure development, and other growth initiatives. The larger pool of investors can contribute varying amounts, ensuring a diverse capital base.
2. Limited Liability: Shareholders of a PLC enjoy limited liability. This means that their personal assets are not at risk in case the company faces financial difficulties or debts. Their liability is restricted to the amount they have invested in the company's shares.
3. Credibility and Prestige: Public Limited Companies often command a higher level of credibility and prestige in the business world compared to private entities. This credibility can attract larger investments, partnerships, and collaborations, enhancing the company's growth prospects.
4. Liquidity of Shares: Shares of a PLC are listed on stock exchanges, providing shareholders with the advantage of liquidity. They can buy or sell their shares in the open market, allowing them to realize their investments whenever needed. This liquidity factor makes PLC shares an attractive investment option.
5. Employee Benefits: Public limited companies can offer employee stock ownership plans (ESOPs) as a form of compensation. This aligns the interests of employees with those of the company and can help retain and motivate valuable talent.

Process of Public Limited company Registration

The process of registering a Public Limited Company in India involves several steps and compliance requirements. Here’s a detailed outline of the process:

1. Promoters' Decision and Planning

   • Decide on the business objectives, structure, and initial capital requirements.
   • Choose a unique name that complies with the Companies Act and isn't similar to existing companies.

2. Director Identification Number (DIN)

   • Obtain DIN for all proposed directors. This is done by filing Form DIR-3 online with the Ministry of Corporate Affairs (MCA).

3. Digital Signature Certificate (DSC)

   • Obtain DSC for at least one director. DSCs are required for filing forms electronically with the MCA.

4. Memorandum and Articles of Association

   • Draft the Memorandum of Association (MoA) and Articles of Association (AoA). These documents define the company's objectives, rules, and internal management.

5. Company Name Approval

   • Apply for approval of the company name using Form INC-1. The name should comply with the guidelines provided by the MCA.

6. Incorporation Application

   • Prepare and file Form SPICe (Simplified Proforma for Incorporating Company Electronically) along with required documents:
     • MoA and AoA
     • Declaration by directors and subscribers
     • Address proof of registered office
     • Identity proof and address proof of directors and subscribers
     • Utility bills of the registered office address

7. Payment of Fees

   • Pay the prescribed fees for incorporation based on the authorized capital of the company.

8. Certificate of Incorporation

   • Upon approval of the incorporation application and verification of documents, the Registrar of Companies (RoC) issues a Certificate of Incorporation. This document signifies the formation of the Public Limited Company.

9. Statutory Compliance

   • Complete post-incorporation formalities such as issuing share certificates, appointing auditors, and conducting the first board meeting.
   • Comply with ongoing regulatory requirements, including filing annual returns, conducting board meetings, and maintaining statutory registers.

10. Commencement of Business

    • Obtain a Certificate of Commencement of Business (if applicable) before commencing operations, depending on the authorized capital of the company.

Documents Required for Public Limited Company Registration

Public Limited Company Registration Fees

The public limited company registration fees in India can vary based on several factors, including the authorized capital of the company. Here is a general overview of the typical fees involved:

1. Government Fees

• Registration Fee: This depends on the authorized share capital of your company

• Up to Rs. 5 lakh: Rs. 4,000

• Rs. 5 lakh to Rs. 10 lakh: Rs. 7,500

• Above Rs. 10 lakh: Rs. 15,000

• Stamp Duty: Varies by state, typically ranging from Rs. 50 to Rs. 1000

• Other Statutory Fees: Additional charges for forms, filings, and certifications might apply.

2. Professional Fees

• Company Secretary Fees: Engaging a qualified company secretary is mandatory for PLCs, and their fees vary based on experience and scope of work.

• Legal Advisor Fees: Consultation with a lawyer for drafting legal documents and navigating regulations incurs additional costs.

• Registration Service Provider Fees: If opting for assistance from a professional service provider, expect fees for handling the registration process.

3. Other Costs

• Digital Signature Certificate (DSC): Rs. 1000–Rs. 2000

• Bank Account Opening Charges: Initial charges and minimum balance requirements vary by bank.

• Printing and Miscellaneous Expenses: Printing documents, courier charges, and other incidental expenses add up.

Taxlegit for Public Limited Company Registration

Taxlegit is a professional service provider that assists businesses with the public limited company registration and compliance processes in India. Here's a comprehensive overview of how Taxlegit can help with the registration of a Public Limited Company:

1. Consultation and Advisory:

   • Taxlegit provides expert consultation to understand the business needs and guide the client through the registration process.

2. Document Preparation:

   • Assistance in preparing and organizing all required documents such as identity and address proofs of directors and shareholders, proof of registered office address, MOA, AOA, and other necessary forms.

3. Digital Signature Certificate (DSC):

   • Taxlegit helps in obtaining DSCs for the proposed directors, which are essential for digital filings with the Ministry of Corporate Affairs (MCA).

4. Director Identification Number (DIN):

   • They assist in applying for DINs for the directors, a mandatory requirement for public limited company registration.