Public Limited Company: Features, Advantages & Registration Process

The corporate segment comprises different types of companies, and one such dominant corporate entity is Public Limited Company. Primarily, the segmentation of these companies occurs on the basis of members or shareholders.

In this piece, we will discuss Public Limited Company in India, its features, advantages and registration process. Stay tuned!

As per the Companies Act 2013, a Public Limited Company is a separate legal entity whose members have limited liability and can offer shares to the general public.

Individuals can acquire shares of Public Limited Company privately via Initial Public Offering (IPO) or via trades on the stock market.

With a clear understanding of the definition of a Public Limited Company, we can move on to the next section, i.e. features and advantages of such a company.

Here are some characteristics of a Public Limited Company.

• A Public Limited Company has a minimum of 3 directors as per the Companies Act, 2013. This act does not impose any restriction on the maximum number of directors.
• The registration process (discussed later) of a Public Limited Company gives it a legal status, thus separating it from the owners.
• Several rules, laws and regulations govern the formation, working and all the activities of a Public Limited Company.
• A Public Limited Company has limited liability.
• This type of corporate entity must have a minimum of ₹ 5 lakh of paid-up capital or higher as stated under the act.
• Public Limited Company issues a prospectus (a detailed statement of its affairs).
• The Companies Act, 2013 mandates all Public Limited Company must add ‘limited’ after the name.

The benefits of a Public Limited Company are as follows:

• Public Limited Company can easily collect capital by selling shares of the company to the general public.
• As Public Limited Company has limited liability, the company owner’s personal assets do not get affected in case of loss or accumulation of debt.
• As shares of Public Limited Company are in most cases with the public, the market risk gets distributed.
• Public Limited Company allows management and staff to purchase shares in the company via management stock bonus (MSB) plan and employee stock ownership plan (ESOP), respectively. This helps to grow responsibility towards a company.
• A Public Limited Company facilitates easier sales transactions than a Private Limited Company.

As individuals now know about the essential details of a Public Limited Company, let’s learn about the registration process.

Follow the steps mentioned below to register a Public Limited Company.

Step 1 - Apply for DSC (Digital Signature Certificate) for all the proposed directors, subscribers of memorandum and articles of association as the registration process is completely online.

Step 2 - Obtain DIN (Director Identification Number). Individuals willing to become the Director of a Public Limited Company must get this number.

Step 3 - Submit the SPICe+ form on the MCA portal. Here, the Director of a company has to register on the portal to complete the procedure.

Step 4 - After submitting the registration application along with essential documents, ROC (Registers of Companies) will verify the application and documents. On verification of these documents, they will issue the Incorporation Certificate of a Public Limited Company.

Note: After a successful registration process, the Director of a company gets access to MCA portal services.

With such a comprehensive discussion, this piece on Public Limited Company in India comes to an end. Read the details attentively and apply the knowledge and understanding while opening a Public Limited Company within the country along with other members.