Public Limited Company Registration in India : A Step-by-Step Guide

What are the requirements for incorporating a limited company?

• Unique name: To register a public limited company, you must have a unique name for the proposed company. You can check company name availability through our online company name search tools.
• Director: There must be at least three natural persons to become directors in the company; their age must be at least 18 years and above, and at least one director must be a resident of India who must have stayed at least 182 days in the previous financial year.
• Shareholders: A limited company must have at least 7 shareholders; they can be a natural person or any entity (a Pvt. Ltd., a public limited company, a HUF, an LLP, a section 8 company, etc.). It is very common in new company registration for directors to also be shareholders; however, directors and shareholders can be different in the company. The percentage of shareholding must be defined.
• Company objects: To start a limited company, you must define the nature of the business and the range of business activities that the company will undertake.
• Registered office: When you start a company in India, the law requires that your business have an official address where any communication relating to the company is sent. The registered office address will reflect on the incorporation certificate.This address will be publically available on the ministry of corporate affairs website for anyone to see. Office can be owned or rented and can be commercial or residential premises. You can use your residence or as your company registered office.
• Documents: Public limited company registration process is an online process; you can just scan / photograph the attested documents of directors, shareholders, and registered office from your mobile phone and send them to us, and the rest will be taken care of.

The following are the main advantages of registering a public limited company:

• Separate legal entity: A limited company is treated as an artificial person; it can acquire, own, enjoy, and alienate assets in its name. The properties owned by a company could be tangible and intangible assets, like trademark, machinery, buildings, residential property, factory, etc. No shareholder can make a claim on the assets of the company.
• Limited liability: Since a limited company is a separate legal entity from its members, the liability of the members for the company’s debts is limited. It provides the best protection for personal assets, as the founder, directors, and stockholders are usually not liable for the company’s debts and obligations.
• Easy raising capital: It has better access to capital from existing investors or from financial institutions. It is allowed to issue debentures, secured as well as unsecured. A public limited company can raise equity funding through the issuance of shares to the public.Since it can sell its shares to the public and anyone is able to invest their money, the capital that can be raised is typically much larger than that of a private limited company.
• Liquidity: Shares of the business can be freely transferred, providing more liquidity to its shareholders. Shareholders can easily buy and sell shares, provided the company is listed on the stock exchange.
• Uninterrupted existence: Once formed, a limited company has a lifetime existence unless it is liquidated. Ownership can be transferred very easily.
• High recognition: By virtue of their transparency and compliance requirements, limited companies are the most reputed business structure; they have a high reputation across international business communities.
• Risk mitigation: Offering shares to the public gives the opportunity to spread the risk of a company among a large number of shareholders. It may allow early investors in the company to sell some of their owned shares at a profit while still retaining a substantial stake in the company. Obtaining capital from a wide range of investors has some added advantages over relying on one or two “angel investors”.
• Transparency: A public limited company requires conducting regular general meetings and regular accounting updates; by doing so, it demonstrates accountability. It helps stockholders know exactly how their shares are faring. Public limited companies require getting their accounts scrutinized by auditors.

What are the advantages of registering a public limited company instead of a private limited company?

In addition to enjoying all those features of a private limited company, a public limited company is entitled to go public, can issue its shares in the stock market, and can raise funds.

The following are the main features of a public limited company:

• A public limited company can have a rather huge capacity of raising capital, much more than that was gathered by a private limited company.
• It is legally authorized to buy and sell shares on stock exchanges.
• There can be unlimited shareholders in a public limited company.
• The shareholders of a public limited company have limited liabilities, limited to the extent of the face value of the shares they own. Again, shareholders do not have to take part in the daily routine management of the business of the company.
• Shareholders of a listed public limited company are entitled to transfer their shares freely without seeking the consent of someone.

What are the documents required for public limited company registration?

Director’s documents for private limited company registration:

• Passport-size photograph
• Copy of the PAN card
• Copy of passport/ driving license/voter identity card.
• Proof of residence (electricity bill, telephone bill, mobile bill / bank statement)

Documents required for the registered office:

• Latest electricity bill, mobile bill, or telephone bill (business place)
• Copy of the rent agreement (if rented property)
• Copy of property papers (if owned property)
• Landlord NOC (format will be provided)

The following documents of shareholders are required in cases where directors and shareholders are different

In case shareholder is a natural person:

• Copy of pan card
• Copy of passport, driving license, or voter identity card
• Proof of residence of shareholders (electricity bill, telephone bill, mobile bill, bank statement )

In case shareholder is corporate body:

• Registration certificate
• Copy of pan card
• Form INC-22 and challan if the address is different from the registration certificate.

All documents should be self-attested and provided in soft copy.