Public limited company registration is completed as per provisions prescribed under the Companies Act, 2013. A public limited company can offer its share to the general public either through Initial Public Offerings (IPO) or by trading on the stock market.
Overview of Public Limited Company Registration
Public Limited Company Registration is the ideal choice for an individual to start a small or medium scale business as private limited companies enjoy all the benefits of a corporate entity with limited liabilities. Like any other company, public limited company registration is done as per the Companies Act's provisions, 2013.
A public limited company can sell its share to the general public to raise the share capital of the company. It can be formed with a minimum number of seven members and a minimum of three directors. There are no rules and regulations regarding the maximum number of members a company can have, but the maximum number of directors a public limited company is 15. It is necessary that one of the company directors must be an Indian resident and has to stay for a minimum of 182 days in India during the previous financial year.
A public limited company registration avails the benefits of a private limited company and more transparency and easy transferability of shareholding and ownership.
Characteristics of Public Limited Company Registration
What are the Advantages of Public Limited Company Registration?
The following are the benefits of registering a company as a public limited company:
Limited Liability for the Shareholders
The Shareholders of a public ltd. company has the advantage of limited liability. Limited liability look after the shareholders' personal assets as the assets of a shareholder cannot be snatched by the bank, nor the can be used to clear debts or losses of the public ltd. company. The shareholders of a public ltd. the company are responsible for their own illegal offences.
Perpetual Succession
A public ltd. company is considered as a corporate body, which has perpetual succession. It means if, in case of death, insolvency, insanity and retirement of one or more directors, members or shareholders the company still continues its business functions.
Raise Capital through Issue of Shares
Shortage of capital is inescapable while running a business, but public limited company registration offers shares to the general public to elevate capital. The general public is asked to buy shares by trading shares on the stock market or offering. Hence, any person can invest in a public ltd. company and it improves the capital of the company.
Borrowing Capacity
A public limited company enjoys boundless sources for borrowing funds. A public ltd. company can issue equity and debentures and sell the share to the general public and can also accept deposits. Moreover, most of the banks and financial institutions find public limited companies more prominent for loans and borrowings than other unregistered organizations. The public limited company also holds the authority to negotiate the terms and conditions of loan payment.
Funds are Easily Transferable
The shares of a public ltd. company are easily transferable. The stocks of public limited companies are listed on the stock market, so this attracts more shareholders to invest in the company.
Steady Business Growth
The public limited companies have the advantage of adapting tech-driven modus operandi and expand the business swiftly with the accessibility to a sufficient amount of capital.
More Attention
The public limited companies are listed on the stock exchange; this ensures that hedge funds, mutual funds, and other traders pay attention to a public limited company's business. This attention may result in exceptional business opportunities for a public limited company.
Spreading Risk
The shares of a public ltd. the company are sold to the public through initial public offerings or by trading them on the stock exchange, so the large unsystematic risk of the market is spread out.
Better Opportunities for Expansion and Growth
The spreading of the risk leads to enhanced opportunities so that the public limited company can expand and grow by investing in new ventures from the funds raised by selling shares in the stock market.
Necessary Documents Required for Public Limited Company Registration
Below mentioned are the documents that are necessary for the public limited company registration; the applicant company has to collect and submit these documents along with the incorporation application.
Shareholders and directors PAN Card.
Designated shareholders and directors have to submit their identity proofs such as PAN card, Aadhar Card, Driving license, Voter ID card, or any other approved Identity proof.
The directors and shareholders of the public ltd. company have to submit address proof. The details of the provided address proof must the details of the PAN card.
The applicant company has to provide utility bills as proof of the registered office of the company. Utility bills can be a telephone bill, electricity bill, water bill, gas bill, etc. But they should not be older than two months.
If the company's registered office is on a rented or leased premise than the No Objection Certificate from the owner of the premises.
All the designated directors have to provide Directors Identification Number (DIN).
All the directors of the company must obtain a Digital Signature Certificate (DSC).
Memorandum of Association (MoA) of the proposed company.
Article of Association (AoA) of the proposed company.
Conclusion
Public limited company registration is the ideal choice for an individual to start a small or medium scale business as private limited companies enjoy all the benefits of a corporate entity with limited liabilities. Just like any other company, public limited company registration is done as per the provisions of the Companies Act, 2013.