Public Limited Company is an ideal preference for Corporate entities (large and medium-sized businesses) who plan to raise capital from the public.
Public limited companies have several stringent regulatory requirements than Private Limited Companies. Public Limited Company provides limited liability to its management and its owners. Public Company will allow a firm to sell shares to investors to raise capital. For establishing a Public Limited Company, a minimum of three directors are required.
In a PLC, the minimum number of members is seven and there is no limit for members. Shares, number of shares, formation, meetings, number, directors, number of members, management, etc. are the identifying marks of a Public Limited Company. A Public Limited Company enjoys all the benefits similar to that of a Private Limited company and can have more transparency and ease in transfer of shareholding.
Under the Act, a company is a legal unit and an authorized person. Therefore, it has a set of legal abilities such as incurring liability and owning property. Creditors of a company will not have any liability from the members (Shareholders/Directors) for any debts incurred by the organization.
A Public Limited Company has limited shares, which are transferable to others from a Shareholder. By signing a Share form, filing and handing over to the share buyer with a Share certificate, you can transfer shares easily.
As far as the company is an ongoing consent, Shareholders cannot claim the property of a company. A company is an unauthorized person, can obtain, enjoy and sell property, own its name.
A company is a legal person must remain unaltered by the departure or demise of any member but will continue to exist regardless of the modifications in the membership. A company has ‘perpetual succession’, meaning it remains to be in constant existence until it is legally dissolved.
Financial Institutions and Banks prefer to provide considerable monetary assistance to a company rather than proprietary concerns or partnership firms. A company can issue debentures and accept deposits from the public, etc. Therefore, a company enjoys better avenues for borrowing funds.
The proposed Directors will obtain DSC and DIN to register for a Public Limited Company. For a Public Limited Company, the proposed Directors can acquire DSC and DIN in 2-3 days.
Depending on the availability, name approval, naming guidelines and MCA processing time can be acquired within 2-3 working days. A minimum of one and a maximum of six proposed names must be submitted to the MCA for approval.
In general, MCA will approve the Public Limited Company application incorporation in 2-3 working days, subject to their processing time. Documents of Incorporation can be submitted to MCA with an application for Incorporation.
Directors and Shareholders of the company are required to submit their identity and address proof, to be incorporated. In the case of foreign nationals, it is mandatory to submit a notarized copy or apostilled copy of their passport. In case of Indian nationals, PAN is compulsory. Documents which are submitted must be valid. Residence proof documents like bank statements or electricity bills are supposed to be less than 2 months old.
Every company must have a registered office in India. To prove access to the registered office, submit a tax receipt or electricity bill along with rental agreement or sale deed, a letter from the landlord with his/her permission to utilize the office and/or a recent copy of the water bill.