A Public Limited Company is a joint-stock association of members and is managed by the rules and regulations laid by the government under the Companies Act, 2013. The company has the right to list the stocks for the general public to generate capital and its stocks can be easily purchased by people through IPOs(Initial Public Offerings) or by trading on the stock exchange. Here is an overview of Public Limited Company Registration.
Given below are the necessities for the formation of a Public Limited Company:-
The following list of documents are required for the incorporation of a Public Limited Company:-
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Public Limited Companies are separate legal companies and function independently. Also, they are entitled to have their distinctive identity by having a PAN, bank account, assets, etc.Generation of funds
Public limited companies seem quite attractive to investors such as banks and other financial institutions. Also, these companies can raise capital by issuing equity or preference shareholding or by issuing security/insecurity debentures.Ease of share transfer
This is a major benefit of Public Limited Companies that the shares can be easily transferred to other companies or individuals. Also, if the director needs to be changed for perpetual succession, it can be easily done by completing a few formalities.Expansion opportunities
Public limited companies are on the lower side of risk when it comes to business expansion. They are eligible to get financial aid easily and they can generate funds by listing their stocks on the exchange. Also, as the shares are available to a wide range of people, therefore, the uncertainty of the market fluctuations doesn't have much impact on the overall. Thus, Public companies have dignified growth potential.
As Public Limited Companies are larger organizations, they must meet the regulatory standards set by the government. Hence, there’s increased surveillance on them by the government agencies like the IRS and all the policies and procedures are required to be fulfilled in all terms.Strict observance of all policies
Public Limited Companies must furnish all the reports to the overall public as well as to the regulating bodies. There should be clear-cut transparency and it must be noted that the rules and regulations are strictly followed.Difficulty in taking decisions
The decisions of the Public Limited Companies are in the hands of many people. Thus, decisions regarding many trivial matters might get delayed due to differences in opinions among the members.Privacy may be hampered
Public Companies have to let their company details open to the public and therefore there is lesser privacy regarding the company matters.
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Public Limited Companies need a minimum of 7 shareholders and 3 Directors for their incorporation. However, there is no upper limit on the maximum number of shareholders.
Yes, an individual of foreign origin may be a director in a Public Limited Company after obtaining the Director Identification Number. However, among the Directors, one must be a citizen of India.
No, Public Limited Companies haven’t any such liabilities on the Directors to pay off the debts. The liability is limited to the face value of each share the members own.
A Public Limited Company ensures separation of ownership from management and hence, the shareholders have no right in the management of the business.
The deciding powers in an exceedingly Public lImited Company, rest in the Board of Directors, and all the decisions are jointly taken by them.
Normally, it takes 8-15 days for registering a Public Limited Company. However, it may take many more days and depends on various factors.
MOA( Memorandum of Association) and AOA( Articles of Association) means the set of rules provided by the Companies Act, 2013 and signify the objectives and therefore purpose of the company is incorporated.
To become the Director in a public limited company, an NRI must furnish the subsequent documents:-
The share capital should be deposited within 2 months from the date of incorporation into the company’s bank account.