What is Public Limited Company?

A Public Limited Company (PLC) is a type of business entity with shares offered to the general public, often listed on a stock exchange. This structure allows companies to raise substantial capital from public investors, which can be pivotal for large-scale ventures.

Key Characteristics of a Public Limited Company

1. Directors:
To establish a Public Limited Company, the Companies Act, 2013 mandates a minimum of three directors. However, there is no cap on the maximum number of directors, providing flexibility in governance.

2. Limited Liability:
Shareholders of a Public Limited Company enjoy limited liability. This means they are only liable for the company’s debts up to the amount they have invested. Unlike partnerships or sole proprietorships, shareholders’ personal assets are generally protected. However, they are still accountable for any illegal actions they may personally undertake.

3. Paid-up Capital:
A Public Limited Company requires a minimum paid-up capital of ₹5 lakhs (or a higher amount as prescribed by law). This threshold underscores the company's ability to manage substantial financial responsibilities.

4. Prospectus:
A PLC must issue a prospectus when offering shares to the public, as required by the Companies Act. This document outlines the company's business details and potential risks. In contrast, Private Limited Companies do not have this requirement since they cannot publicly solicit investments.

5. Name Requirement:
As per the Companies Act, 2013, the name of a Public Limited Company must end with “Limited,” indicating its corporate structure.

Advantages of a Public Limited Company

Increased Capital:
By offering shares to the public, PLCs can attract a broad range of investors, significantly boosting their capital reserves.

Enhanced Visibility and Trust:
Listing on the stock exchange can attract institutional investors like mutual funds, bringing greater credibility and visibility, which may lead to new business opportunities.

Risk Diversification:
Public ownership allows a broader distribution of market risks, as shares are widely held among various investors.

Growth and Expansion:
With access to public funding, PLCs can invest in new projects, promoting growth and expansion.

Registration Requirements for a Public Limited Company

To register a Public Limited Company, one must follow specific guidelines outlined by the Companies Act, 2013:

Minimum seven shareholders and three directors are required.
A minimum paid-up capital of ₹5 lakhs is mandatory.
Obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN) for directors.
Apply for the company name and submit necessary documents, including the Memorandum of Association (MOA) and Articles of Association (AOA), to the Registrar of Companies (ROC).
Complete forms DIR-12, INC-7, and INC-22 as part of the registration.
After ROC approval, apply for a ‘Certificate of Business Commencement.’

Related Services

Incorporation of Private Company

Step 1: Submit your enquiry for the incorporation of a private company along with details about the business, proposed company name, and objectives.Step 2: Advisor shall schedule a consultation meeting to discuss the requirements, benefits, and compliance obligations of forming a private company.Step 3: Client shall provide necessary documentation, including identification and address proof for all directors and shareholders, and any existing business agreements.Step 4: Advisor shall assist in drafting the Memorandum of Association (MoA) and Articles of Association (AoA) for the private company.Step 5: Client shall review and approve the MoA and AoA, making any necessary modifications before finalization.Step 6: Advisor shall file the incorporation application along with the required documents with the Registrar of Companies (RoC).Step 7: Client shall receive confirmation of the incorporation along with the Certificate of Incorporation and the company's PAN and TAN.

Annual Return Filing for Companies (ROC)

Step 1: Submit your enquiry for annual return filing along with details about the company, including the financial year for which the return needs to be filed.Step 2: Advisor shall schedule a consultation meeting to discuss the filing requirements, deadlines, and necessary documents for the annual return.Step 3: Client shall provide necessary documentation, including the company's financial statements, details of directors, shareholders, and any changes in the company structure during the financial year.Step 4: Advisor shall prepare the annual return, ensuring all information is accurate and complies with the relevant regulations.Step 5: Client shall review and approve the drafted annual return, making any necessary modifications before submission.Step 6: Advisor shall file the annual return with the Registrar of Companies (RoC) before the due date.Step 7: Client shall receive confirmation of the successful filing along with a copy of the filed annual return for their records.Step 8: Advisor shall provide ongoing support regarding compliance requirements, including reminders for future filings and assistance with any follow-up communications with the RoC. 

Appoint/Change of Directors/Partners/Auditors

 Step 1: Submit your enquiry for appointing or changing directors, partners, or auditors along with details about the entity and the proposed changes.Step 2: Advisor shall schedule a consultation meeting to discuss the requirements for the appointment/change and the implications of the proposed changes.Step 3: Client shall provide necessary documentation, including identification and address proof for the new directors/partners/auditors, and any existing documents related to the entity's structure.Step 4: Advisor shall prepare the necessary resolutions and forms (e.g., Form DIR-2 for directors, Form 3 for LLP partners, and Form ADT-1 for auditors) required for the appointment/change.Step 5: Client shall review and approve the prepared resolutions and forms, making any necessary modifications before submission.Step 6: Advisor shall file the required forms with the Registrar of Companies (RoC) or the relevant authority, along with the prescribed fees.Step 7: Client shall receive confirmation of the successful appointment/change along with any updated documents issued by the RoC or relevant authority.Step 8: Advisor shall provide ongoing support regarding compliance requirements, including reminders for any future filings or updates related to the directors, partners, or auditors. 