Public Limited Company
A public limited company is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited.
Registration of Public Limited Company Minimum requirements
- Formation of Public Limited Company
- Minimum 3 Directors
- The directors and shareholders can be same person
- Minimum Share Capital shall be Rs. 500,000 (INR Five Lac)
- DIN (Director Identification Number) for all the Directors
- DSC (Digital Signature Certificate) for one of the Directors
- Public Limited Company registration process:Estimated Registration Time Frame 4-6 weeks
Public Limited Company Features
- The company has a separate legal existence apart from its members who compose it
- Its formation, working and its winding up, in fact, all its activities are strictly governed by laws, rules and regulations. The Indian Companies Act, 1956 contains the provisions regarding the legal formalities for setting up of a public limited company. Registrars of Companies (ROC) appointed under the Companies Act covering the various States and Union Territories are vested with the primary duty of registering companies floated in the respective states and the Union Territories.
- A company must have a minimum of seven members but there is no limit as regards the maximum number
- The company collects its capital by the sale of its shares and those who buy the shares are called the members. The amount so collected is called the share capital
- The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company
- The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company
- The shareholders of a company do not have the right to participate in the day-to-day management of the business of a company. This ensures separation of ownership from management. The power of decision making in a company is vested in the Board of Directors, and all policy decisions are taken at the Board level by the majority rule. This ensures a unity of direction in management
- As a company is an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders
DSC is a legally recognized method of signing documents electronically. A digital signature is a type of asymmetric cryptography used to simulate the security properties of a handwritten signature on paper. Digital signature schemes normally give two algorithms, one for signing that involves the user’s secret or private key, and one for verifying signatures that involves the user’s public key. The output of the signature process is called digital signature.
Digital signature certificates are used by programs on the Internet and local machines to confirm the identity of a third party.
Digital signatures have often confused with scanned copies of a physical written signature, which do not have any legal backing for authentication of electronic documents.
DIN is an identification number issued by the Ministry of Corporate Affairs, Government of India, to Directors of a company or Designated Partners of an LLP.
For obtaining DIN, an online application has to be submitted to the Ministry of Corporate Affairs with a copy of Identity and Address Proof of the Applicant and a declaration by the applicant. The Online DIN Application has to be signed by a Practicing Company Secretary / Chartered Accountant / Cost Accountant.
List of Documents acceptable as Identify and Address Proof
|Documents||Identity Proof||Address Proof|
|PAN Card (Mandatory for Indian Nationals)||Yes||No|
|Passport (Mandatory for Foreign Nationals)||Yes||Yes|
|Telephone Bill / Electricity Bill / Bank Account Statement|
MOA is the charter document of a company. A company is created by registering a memorandum.
MOA contains the name of a company, the state in which the registered office of the company is located, objectives, and its authorized capital. The MOA will be subscribed by the initial promoters of the company in their own handwriting. They will also have to write their name, father’s name, residential address, occupation and the number of shares they agree to subscribe in the company. The MOA should also bear the signature of the witness who knows the subscribers.
The details of subscribers to the MOA cannot be amended or changed at any point of time during the life of the company, as it constitutes the document giving birth to a company. Subsequent changes in the shareholding or directorship of the company should be reflected in its internal records and will not affect the subscriber details in the MOA
AOA is the bylaws of a company and can be filed along with the incorporation document.
AOA contains rules and regulations for the management of a company’s internal affairs and conduct of its business. It defines the relationship of company between its members and directors and relation between members and directors. It also describes powers of directors. Further, the AOA describes the rights and duties of its members as well as the duties and responsibilities of its directors.
In case of a private limited company, the AOA will contain the restrictions of transfer of shares, if any. Also, AOA usually contains the names of first directors of a company.
The AOA will be subscribed by the initial promoters of the company in their own handwriting. Promoters will have to write their names, father’s name, residential address, and occupation. The AOA should also bear the signature of the witness who knows the subscribers.
The details of subscribers to the AOA cannot be amended or changed at any point of time during the life of the company, as it constitutes the document giving birth to a company. Subsequent changes in the shareholding or directorship of the company should be reflected in its internal records and will not affect the subscriber details in the AOA.
CIN is the number allotted to a company registered in India by the Ministry of Corporate Affairs, Government of India.
CIN is a 21-digit number that contains the information such as status (listed / unlisted), NIC code of business activity, state of registration, year of registration, private or public and the sequential registration number in the respective state
Unlike private companies, a public company cannot start its business after getting the certificate of incorporation. It has to obtain a certificate of commencement of business from the ROC.
The ROC will issue the certificate of commencement of business after a public company files the ‘Statement in Lieu of Prospectus’ (SLP).
SLP is required by a public company for obtaining the certificate of commencement of business. It contains the details of first shareholders, directors, the amount of capital brought in, the details of auditors and preliminary expenses for company incorporation etc.