Overview of Public Limited Company Registration

Public limited companies enjoy all the rights of a corporate entity with limited liabilities and it is an ideal choice for the small and medium scale enterprises who wish to raise the equity capital from the general public.

Basic Clarification on Incorporation of Public Limited Company

Just like other companies, Public Limited Company is also registered as per the rules and regulations of the Companies Act, 2013. A public Company enjoys the benefits of limited liabilities for its members and has rights to sell its shares for raising the capital of the company. It can be incorporated with a minimum number of three directors and has more stringent rules and regulations as compared to a Pvt. Ltd. Company.

It must have a minimum number of seven members whereas there is no limit for the maximum number of members. It provides all the benefits of a private limited company along with more transparency and easy transferability of ownership and shareholding. Name, shares, formation, number of members, management and directors, etc differentiates any Public limited company from the private limited companies.

Benefits of Public Limited Company Registration

Here are the benefits provided to the company with Public Limited company registration

• Limited liabilities for the shareholders of the company

  Shareholders of the public company enjoy the benefits of limited liabilities under which their assets are safe and cannot be used to clear the debts and losses of the company. Despite of it, the shareholders are responsible for their own legal offenses. All the members, directors and shareholders enjoy this right and their assets cannot be seized by any bank, creditors or government bodies.

• Perpetual Succession

  A public limited company is considered as a corporate body that has perpetual succession. Means in case of death, retirement, insanity, and insolvency of one or more members/ shareholder/ directors, the company still continue its existence.

• Improved capital of the company

  In a public limited company, the general public is invited to buy the shares of the company. Hence, anyone can invest in a public company that improves the capital of the proposed company.

• Borrowing Capacity

  A public company can enjoy unlimited sources for borrowing funds. It can issue equity, debentures and can accept the deposits from the general public by selling its shares. Moreover, most of the financial institutions find public companies more prominent than other unregistered companies.

• Fewer risks

  Since public companies can sell their shares to the public, it lesser the scope of unsystematic risks of the market.

  Better opportunities for growth and expansion of the company:

• Fewer risks lead to better opportunities so that the company can grow and expand by investing in new projects from the funds raised by selling its shares in the market.

Documents Required for Public Limited Company Registration

An applicant has to collect all these documents to file along with the incorporation application:

• Identity Proof such as Aadhar card, PAN card, Driving License, Voter Id of all the designated directors and shareholders. 
• Address Proof of all the proposed directors and shareholder of the company.
• PAN card details of all the directors and shareholders
• Utility bill such as telephone, gas, water or electricity bill of the registered office as a residential proof of the business place. It should not be older than 2 months. 
• An NOC or No Objection Certificate from the landlord of the business place. 
• DSC or Digital Signature Certificate of the designated directors
• Memorandum of Association (MOA) and Article of Association (AOA)

Features of Public Limited Company Registration

Here are some important features of Public Limited Company:

• Number of Directors in the company

  As stated in the provisions of Companies Act, a public company must have a minimum number of 3 directors to incorporate a company whereas there is no restriction on the maximum number of directors.

• Name of the Company

  All the Public limited companies must add “Limited” word at the end of their name. it is denoted as an identity of a public company.

• Prospectus of the Company

  Prospectus of the company is mandatory for the public limited companies. It is issued by the proposed company for its general public. It is a note of comprehensive statements of works and affairs of the company. However private companies have no such compliances as they don’t have rights to invite the public for their shares.

• Paid-up Capital

  As per the requirements of the act, no minimum capital required for the registration.

What is the difference between the Public limited Company and Private Limited Company?

There are various points of differences between both these companies. Here are some chief differences between both:

Public Limited Company Registration Procedure

• Step 1: Apply for the Digital Signature Certificate

  First of all, you have to apply for the Digital Signature Certificate for all the proposed directors in the company. DSC is used to sign the e-forms and is an authentic and safe method to file all the documents on an electronic platform. It is a mandatory document.

  A director can easily obtain DSC from the nearest Certifying Authorities or CAs with self-attested coppices of their identity proof. It takes around 1 -3 working days to obtain a DSC.

• Step 2: Name Verification

  The third step involves name registration of the company. You can check the name availability through the MCA portal by following this step

  Visit the MCA Portal> select the MCA services> Click Check Company Name

  Note: The company name should not be taken or registered and should not be similar to a brand name.

• Step 3: Filing Form SPICe+

  Once the company’s name has been approved you can now file the SPICe+ form to avail the company incorporation certificate. Along with it, you have to file all the required documents such as MOA (Memorandum of Association) and AOA (Article of Association). These two documents contain the details of the mission, objectives, aims, visions, business activities, responsibilities of all the directors and shareholders and definition of the proposed company.

  All the documents and applications are further verified by the higher authorities and it takes around 7 to 9 working days.

• Step 4: Obtaining Certificate of Incorporation

  Once all the applications and document to have been received to the authorities and they have verified it, the company would receive the Certificate of Incorporation which will include CIN and date of incorporation.

Requirements for the Public Company Registration

According to the provisions of Companies Act, 2013 here are the requirements you need to fulfill to incorporate a Public company in India:

• The proposed company must have a minimum number of 7 shareholders
• The proposed company must have a minimum number of 3 directors
•  No minimum capital required
• At least one director should have a Digital Signature Certificate
• Memorandum of Association and Article of Association.
• After approval from Registrar of the Companies, the proposed public company has to apply for the “Certificate of Business Commencement.”

Guidelines as per Companies Act While Naming The Company

Companies Act 2013 prescribes the conditions related to naming the Company whether it is Private Limited, OPC or Public Limited. Following are the conditions which have to be kept in mind while selecting the name for the Company:

• MCA ensures the name applied doesn’t resemble the name already registered as a company or trademark. Mere joining the separate words or using the plural version of the existing name doesn’t make it unique.
• MCA restricts the names which are too general, such as Cotton Company Private Limited
• The name of the Companies cannot start with the name of the person, for instance, Ankita Private Limited.
• The proposed name shall be undesirable if it violets the following conditions:

  • Violets Emblem & Name Act

  • Violates Trademark

  • Includes offensive or misleading words

  The name selected for the Company shall align with the objects of the Company.

  If the Company is incorporated to engage in the business of providing financial services such as chit fund, financing, leasing, etc. shall indicate such activities in its name.

  The name shall not include the words that indicate any constitution or any legal person such as, LLP, Trust, HUF, etc.

  The last words of a Private Company shall end with Private Limited, One Person Company with OPC Private Limited, and the Public Company shall end with the word Limited.

The Procedure of Change Name of Company

Following is the step by step procedure to be followed by the Company willing to change its name:

• Conduct Board Meeting:

  The proposed name shall be discussed by the directors of the Company. Notice of 7 days is issued to the directors to conduct the board meeting to pass the necessary resolution for the approval of name change. Following resolutions are passed in a board meeting:

  • To authorize the Company Secretary or Director to apply ROC for confirming the availability of name selected.

  • To fix the date, time and venue to conduct EGM to approve the new name after it is approved and for the alteration of MOA The Company shall keep in mind that no two companies can be registered with the same name.

• Check the Name Availability:

  Company shall check the name for its availability through MCA. It can be checked whether the same name is registered as a trademark or as a company from the drop-down menu of “Public Search of Trademark” and “Check Company Name”.

• Apply Online for Name Approval:

  After the name is checked and the same is available, it can be applied through new web service RUN. Up to two names can be applied through this form with the prescribed fee of INR 1000. In case the Company is changing its name shall attach the board resolution for authorizing the same as an attachment to this form. After thorough scrutinizing the application, ROC either approves the name or puts it to resubmission. The name approved by ROC remains valid for 20 days from such approval.

• Conduct Extra-Ordinary General Meeting:

  After the name is approved by ROC, and the name approval letter is received by the Company, shall call and convene the EGM to pass the necessary Special Resolution for approval of name change and making amendment to MOA & AOA.

• Filing with ROC:

  Within 30 days of conducting EGM file the special resolution with ROC in form MGT-14 (the form is available on the official website of MCA and can be downloaded as a zip file) along with the following documents annexed with the form:

  • CTC of Special Resolution passed

  • Notice of EGM along with an explanatory statement

  • Altered MOA

  • Altered AOA

• Approval of Central Government:

  Company has to take the approval of the Central Government for the name change and alteration in MOA by filing form INC- 24. Copy of minutes of EGM in which the Special Resolution was passed shall be attached to this form.

• New Certificate of Incorporation:

  After the process of name change is completed, ROC shall issue the new COI with the amended name mentioned on it. The new name becomes effective since the issuance of new COI.

Restrictions on Change Name of Company

Rule 29 of Companies Rules 2014 specifically prohibits the following companies from changing the name:

• A company that has defaulted to file an annual return on time
• The Company which has failed to repay the matured deposit
• A company that has defaulted in repaying matured debentures
• Company has not paid or default in paying the interest on deposit or debentures

Restrictions on Change Name of Company

Rule 29 of Companies Rules 2014 specifically prohibits the following companies from changing the name:

• A company that has defaulted to file an annual return on time
• The Company which has failed to repay the matured deposit
• A company that has defaulted in repaying matured debentures
• Company has not paid or default in paying the interest on deposit or debentures