The Public Limited Company (PLC) occupies the topmost rung of the corporate ladder in India. As per the Companies Act, 2013, a PLC is a voluntary association of individuals that enjoys separate legal status and provides limited liability to its stockholders. A PLC differs from a Private Limited Company in that it does not cater to close-knit family enterprises but rather to enterprises that require large-scale investments.
Ruchi Anand & Associates knows that for an organization, becoming or transforming itself into a Public Limited Company is a landmark event. This means that it has matured enough to not only move away from private financing but to also explore the endless possibilities of raising money from the public markets. The use of the word "Limited" at the end of the organization's name adds prestige, allowing it to enter into international business and government contracts.
While the term "Limited Company" generally refers to a Public Company, it can be categorized based on its listing status and liability:
The most important reason for incorporating is that a Public Limited Company can make an Initial Public Offering, whereby the company can raise huge amounts of equity funds from the public. These funds may be used to finance growth, carry out research, or to repay debts.
The shares in a PLC are movable property and easily transferrable to others. An investor is able to sell off his shareholding in the market without the need for getting prior approval from fellow shareholders.
As opposed to a Private Limited Company which has a maximum of 200 shareholders, the PLC has no limit to its membership.
Banks and financial institutions will consider the Public Limited Company stable and transparent. Therefore, raising huge amounts of loanable funds, issuing debentures, or taking unsecured loans at favorable rates will become much easier.
The lifespan of the business entity is endless and is not influenced by factors such as death, retirement, or even bankruptcy of its members or directors.
To ensure a valid incorporation, the following statutory mandates must be satisfied:
At Ruchi Anand & Associates, we follow a rigorous 6-step process to ensure your public company is compliant from day one:
We obtain ID proofs, address proofs, and photographs of all 7 members and 3 directors to get their respective Digital Signatures.
We apply for Name Reservation to the MCA. Here we suggest selecting a name that indicates the global ambition of the brand keeping in view the Companies (Incorporation) Rules.
This stage is technically complex because here we draft a detailed Memorandum of Association (MoA), explaining the objectives of the firm and a comprehensive Article of Association (AoA) detailing internal management processes. The same should be done with listing aspects for public companies.
Here we file INC-32 (SPICe+) form for which we need to include the application for getting Certificate of Incorporation, DIN, PAN, and TAN.
The ROC will then verify the application and if the requirement of law is fulfilled, they will issue the Certificate of Incorporation (COI).
A Public Limited Company will not be able to commence business after getting COI and it needs to file the declaration of 'Commencement of Business' in 180 days by submitting proof of payment of agreed-upon share capital.
No, the law strictly requires a minimum of 7 shareholders and 3 directors.
No. You can remain an unlisted public company for as long as you wish. Listing is a choice based on funding needs.
A Public Limited Company must undergo a statutory audit by a Chartered Accountant every year, regardless of its turnover.
Yes, foreign nationals can be directors, provided at least one director is a resident of India.
Choosing Ruchi Anand & Associates means partnering with a firm that understands the scale and gravity of a Public Limited Company.
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