PUBLIC LIMITED COMPANY
@ Rs 14999 All Inclusive No Hidden Charge
*Stamp Duty Extra For Madhya Pradesh, Punjab & Kerala
A public limited company is the best option for the prominent entrepreneur. It gives the opportunity to expand the business on a big platform.
WHAT IS PUBLIC LIMITED COMPANY?
A public limited company is a business model which is registered by the Ministry of Corporate Affairs. It gives a big platform to the entrepreneur for expanding their business on national as well as international level as the name comprises “PUBLIC” word which clearly shows that the company can raise their funds from the general public and they have full interest and stake in the company. However, their liabilities are limited. A public company generally starts with a minimum of 7 people, but there is no maximum limit of the shareholder. In private limited company, the numbers of members restricted to only 200, but there is no such limit in the public limited company which means there can be either 50 shareholders or 5000 shareholders in the public company, but it should not be less than 7. The management is handled by the board of directors of the company which contains minimum 3 and maximum 15 individual persons as directors of the company. The trading of the share is also possible under public limited company through the stock exchange. Under this company, any person can become the shareholder of the company no matters where he lives and what is his identity the only thing he needs is that he should hold at least one share of the company to become its shareholder. People invest their funds and get the opportunity to earn a profit in the form of dividend and other different ways.
What Do You Get In Public Limited Company
Documents Required For Public Limited Company Registration
Process Of Public Limited Company Registration
- Submit Documents
- Name Approval
- Digital Signature
- Documents Preparation
- Company Incorporation
You need to submit all the required documents.
We will verify all the documents and then apply for the name approval through the RUN application form. In one form we can apply for 4 names. Name of the company is subject to Government approval.
After the name approval of the company, we will apply for the Digital Signature. For Digital Signature Video Verification will be required.
After Name approval and Digital signature, we will draft Memorandum of Association, Article of Association and subscription statement of your company and will submit it to the Registrar of Companies with prescribed e-form Spice 32. We will apply for PAN and TAN application simultaneously.
Once all the documents submitted are duly verified by Registrar of Companies, the approval is given and the Certificate of Incorporation is sent to you on your email id.
More About Public Limited Company
SHAREHOLDER: For incorporating a public limited company minimum seven people are required as a shareholder of the company. The minimum shareholder of the company is 7, but there is no maximum limit of the shareholder. The companies have to maintain the minimum shareholder limit during its life. If anytime during the life of the company this limit falls below the required threshold then the company has to continue the minimum shareholder limit with six months again. An individual can be the shareholder of the company as well as any other company can also purchase the shares of the company.
DIRECTOR: Minimum 3 directors are required in a public limited company, and the maximum limit is 15. This maximum limit can be increased only after the approval of the shareholder in the meeting of the company. Just the individual person can be appointed as the director of the company and only the shareholders having the right to elect the directors of the company in the general meeting of the company. Among all the directors at least one director shall be the resident of India and must stay in India for at least 182 days in a year.
CAPITAL: In the public limited company there is no minimum capital requirement. In the former act, i.e., Companies Act, 1956 the public limited company needs to maintain minimum capital of Rs. 5,00,000/- . For promoting business in India, the government has removed this provision.
DIGITAL SIGNATURE: Minimum seven shareholders and three directors are required to incorporate the public limited company, and all these people shall have the digital signature certificate (DSC) at the time of incorporation. The company registration process is online, now the form is converted into physical forms to e-forms, and all these e-forms required a digital signature for signing the forms. Hence without DSC, a company cannot get registered.
REGISTERED OFFICE: The companies must have a registered office which should be mentioned in every document of the company. The company will receive all the legal documents and notices at its registered office. Every company shall maintain a registered office if a company wants to change its office then it can be possible with the registrar approval.
BUSINESS ACTIVITY: Any business can be conducted in the company, but the business activity of the company shall not be illegal. The company can change its business activity any time during the life of the company only after taking approval from the shareholders of the company in the general meeting.
NAME OF THE COMPANY: The public limited company contains the word “limited” or “ltd” at the end of the name. For example, there is a company XYZ CONSTRUCTION LIMITED here XYZ is the initial name of the company and CONSTRUCTION word denote the business activity of the company, and it is mandatory to insert the business activity in the name of the company and at the end LIMITED word indicates that the company is a public limited company.
LIMITED LIABILITIES: There is no limit on the maximum number of the shareholder in the company, and all these shareholders enjoy the limited liabilities benefit which means the shareholders and director of the company having limited liabilities. They are not personally liable for any debt and loss owned and incurred by the company as the identity of the shareholder, and the company is different from each other.
BORROWING CAPACITY: Raising fund is quite easy for the public limited company as they can invite the general public for investing their funds in the company. Banks and financial institutions also rely on the public limited company as the company needs to follow all the rules and regulations made under different laws.
SHARE TRADING FACILITY: The shares of the public limited company are readily available on the market, and it can be traded easily through the stock exchange. For public involvement, this facility provided under public limited company only so that the general public can take part in the company.
LIQUIDITY: As the shares of public limited companies are readily available in the market the selling of shares are also very easy hence the company always gives the best liquidity option to its shareholders. If any shareholder wants to sell the shares, he can directly sell it in the share market without following any complex provision.
EXPANSION OPTION: As the company has many options for raising fund and due to funding advantage the company having a big prospect for its expansion. An expansion needs the fund and company are capable of raising funds. Due to this option the company can:
- Enter into a new project
- Purchase new technology
- Take steps in research and development for new technology
- Write off or pay off its all liabilities and debts
- Expand its brand value
- Enter into another or global market
- Starts working in a different sector also; and many other options
MORE CREDITABILITY: The public limited company runs its business and operations under strict legal regulations due to which it is having more creditability as compare to another form of company. Due to different norms under a different law, the company has to maintain the transparency between the company and all its stakeholders.
BETTER MANAGEMENT: The management of the company is handled by a small group of people known as the board of directors. The directors are responsible for the shareholders of the company, and they have to answer all the queries and company status to its shareholders.
STRICT REGULATIONS: As compared to the private limited company the public limited company has to comply with many different regulations under different laws. The motive of all these laws is to protect the shareholders and creditors of the company and company have to follow all these rules and regulation mandatorily and if the company fails to comply these provision the company and its office in default will be liable to get penalized.
HIGH TAX LIABILITY: The company falls under the flat 30% tax rate category. They have to pay 30% of its profit as a tax whether the profit amount is Rs.1,00,000/- or Rs. 1 Crore it is a fixed rate of tax.
OWNERSHIP: The ownership controlled by the shareholders of the company and the management, i.e., the board of directors cannot take any significant decision without the prior approval of the shareholder of the company. They even cannot start any new project without shareholder prior consent. In a private limited company, the ownership and management is handled by the same person, so there is very less chance for interference but in public limited company they both are very different, and the board cannot take any major decision and cannot make any changes in the company without approval.
MANAGEMENT DECISION PROBLEM: A public limited company is vast in size as compared to other companies and may face the management issue. It is not easy to handle big enterprises by a small group of person so there is a chance that the directors of the company may contradict with each other due to which the company may suffer from loss and other industrial issues.
CONFIDENTIALITY ISSUE: The company has to disclose all its guidelines, bye-laws, financial matters, and financial positions, code of conduct of its BOD, brand value and about the new project on the website of the company.
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