Planning to launch a business that aims to achieve significant growth? Registering your entity as a public limited company in India could be a smart decision, especially when your objective is to raise funds from the masses and establish yourself as a reputable organization.
In India, the public limited company is one of the most preferred types of entities to incorporate due to its advantages of limited liability, fund-raising potential, and corporate reputation. However, the registration of a public limited company comes with rigorous legal requirements as mandated by the Companies Act, 2013.
Learn the complete process to register a Public Limited Company in detail through our easy-to-understand guide below.
What Is A Public Limited Company?
Public Limited Company (PLC) refers to a company which has been established under the Companies Act, 2013 and where the shares of the company may be freely traded and sold to the investors.
As compared to private limited companies, less stringent conditions apply in public companies in respect of transferability of shares and raising funds from the general public by issuing shares after compliance with SEBI requirements.
Quick Definition (Featured Snippet Optimized)
The Public Limited Company is a firm that has been established under the Companies Act, 2013 of India and involves public participation in terms of shares held.
Public Limited Company Registration Process
Registration of a Public Limited Company in India involves certain processes and requirements as per Companies Act 2013. Below are explanations of the different steps required for registration.
Step 1: Acquisition of DSC
A Digital Signature Certificate (DSC) must be obtained by all directors as the entire registration process is conducted online using the portal provided by the Ministry of Corporate Affairs (MCA).
Step 2: Application for DIN
All individuals that intend to act as directors of the business entity must apply for a Director Identification Number (DIN). DIN applications are done through the SPICe+ registration of incorporation form.
Step 3: Name Approval Via MCA
It is necessary for the promoters to select an appropriate company name that complies with MCA name regulations and does not coincide with any other existing company or trademark and approve it using RUN or SPICe+ Part A form via MCA online portal.
Step 4: Creation of MOA & AOA
The Memorandum of Association (MOA) is the document in which the company’s goals and activities are outlined whereas the Articles of Association (AOA) contain internal management-related clauses.
Step 5: Fill SPICe+ Incorporation Form
SPICe+ is the primary form for registration of a company and consists of various services like incorporation, PAN, TAN, EPFO, ESIC, and optional GST in one form.
Step 6: Submission of Necessary Documents
All documents like proof of identity, address, registered office, and incorporation must be submitted together with the SPICe+ application. Good documentation will help prevent any problem that might arise later.
Step 7: Payment of Registration Fees to Government
The applicant will have to make payment for the fees prescribed by the government for incorporating the business depending on its authorized capital. This payment is done online through the MCA website.
Step 8: Verification by Registrar of Companies (ROC)
The application along with all its documents is scrutinized by the Registrar of Companies (ROC). If all is in order, then the ROC approves the request for incorporating the business.
Step 9: Issue of Certificate of Incorporation
Upon successful verification, the ROC provides the Certificate of Incorporation (COI). The COI indicates that the Public Limited Company has been formed. It also includes the Corporate Identification Number (CIN) of the Public Limited Company.
Step 10: Open Current Account of the Company
After incorporation, the company can open a current bank account in its own name for carrying out financial activities.
Why Entrepreneurs Choose a Public Limited Company
Companies usually choose the registration of a public limited company since it has:
- Easy acquisition of funding
- Credibility in the market
- Protection from unlimited liability
- Opportunities for growth through public funding
- Positive corporate image
- Transferability of shares
Startups looking to have an IPO or firms that plan fast expansion will find it beneficial.
Features of Public Limited Companies
Knowing the basic features of a PLC assists entrepreneurs in determining if this business form suits their purposes.
- Legal Entity: The firm is recognized as an independent entity distinct from both the stockholders and the board members.
- Limited Liability: Stockholders have liability to the extent of their ownership only.
- Perpetual Existence: The firm remains in existence even if ownership varies.
- Raising Public Finance: Public limited firms have the ability to raise funds through issuing shares and debentures to the public.
- More Accountability: Public firms must adhere to more stringent laws on accounting standards.
- Transferability of Shares: There are few limitations in transferring the shares.
Prerequisites Before Registering a Public Limited Company
Prior to starting the registration of your Public Limited Company, perform these important procedures first.
- Digital Signature Certificate (DSC): This is important because the entire registration process is conducted online, therefore directors require a DSC in order to sign their digital documents.
- Director Identification Number (DIN): All directors must acquire a DIN through the Ministry of Corporate Affairs (MCA).
- Company Name Selection: Ensure that the selected business name is unique and doesn’t belong to another company, isn’t copyrighted, and follows MCA guidelines.
Timeline for Public Limited Company Registration
| Process | Estimated Duration |
| DSC & DIN | 1–3 days |
| Name Approval | 2–4 days |
| Filing & Verification | 3–5 days |
| COI Issuance | 5–10 working days |
Benefits of Registering a Public Limited Company
Registration of Public Limited Companies has various advantages for businesses that want to grow, raise money, and establish a good reputation in the marketplace. Some important advantages of registering a Public Limited Company in India are listed below.
- Fundraising is Easier: Funds can be easily raised through public share issues.
- Liability is Limited: Liabilities of shareholders are limited to their investments in the firm.
- Separate Legal Status: The company enjoys its own status, independent of its members and managers.
- Higher Credibility: Public Limited Companies enjoy better credibility than other business organizations.
- Shares Easily Transferable: There is easy transferability of shares which makes this an advantageous feature.
- Room for Growth: This system is ideal for growth and also for raising funds from investors.
- Perpetual Existence: This firm would continue to run despite any changes that may take place among the board of directors or stockholders.
- Borrowing Capability: Public companies have greater borrowing capacity.
Common Mistakes to Avoid During Registration
- Choosing a Conflicting Company Name: Conduct MCA and trademark searches before making a selection.
- Incomplete Application Information: Differences between signatures and outdated utility bills lead to rejection.
- Misconception in the MOA: Unclear goals could cause legal issues in the future.
- Inadequate Knowledge About Compliance: Most entrepreneurs consider registration but neglect follow-up compliance.
Is a Public Limited Company Right for Your Business?
A Public Limited Company is suitable if you:
- Plan large-scale operations
- Need external investment
- Intend to raise public capital
- Want higher business credibility
- Aim for future stock exchange listing
However, smaller startups with limited compliance capacity may initially prefer a private limited structure.
Conclusion
Comprehending the Process of Public Limited Company Registration is vital for businessmen who aspire to build large-scale, investor-friendly companies within India.
Even though there are several legalities involved in the registration process, the numerous advantages which follow as a result thereof make it an extremely lucrative business format.
In order to register a public limited company easily, it is important that you have your paperwork sorted and you seek proper advice at the very outset.
The proper registration of a business today may just be the beginning of something really big tomorrow!
FAQ’s
How Many Directors Are Needed For Public Limited Company?
There should be at least three directors for a Public Limited Company in India.
What Should Be The Minimum Capital Of Public Limited Company?
Presently, no mandatory minimum paid-up capital exists under the Companies Act, 2013.
Is A Public Limited Company Allowed To Raise Money From The Public?
Yes. A Public Limited Company is allowed to raise money from the public by issuing shares.
How Much Time Is Taken For Registration Of Public Limited Company?
The registration process usually takes about 7-15 days.
Is GST Registration Mandatory During Incorporation?
GST registration is optional during incorporation unless your business falls under mandatory GST applicability.
