Public Limited Company

Overview

A Public Limited Company is a company incorporated under the Companies Act, 2013 that can offer its shares to the public and raise capital from a wide base of investors. It requires a minimum of seven shareholders and three directors, and its shares are freely transferable. This structure suits businesses planning large-scale operations, institutional funding, or a future listing on a recognised stock exchange. It carries higher compliance obligations than a private company because of the greater public interest involved.

Objective

To incorporate a company that can raise capital from the public and offer freely transferable shares while operating under the Companies Act, 2013.

Characteristics

• Minimum seven shareholders and three directors
• Shares are freely transferable and can be offered to the public
• Separate legal entity with limited liability for members
• Perpetual succession independent of its shareholders
• Higher disclosure and governance requirements than a private company

Eligibility

• At least seven shareholders and three directors
• At least one director resident in India during the financial year
• A registered office address in India
• Directors holding a valid Director Identification Number and Digital Signature Certificate

Governing law

• Companies Act, 2013
• Ministry of Corporate Affairs (MCA)
• Registrar of Companies (ROC)
• Securities and Exchange Board of India (SEBI), where shares are listed

The process

1. 1
   Obtain digital signatures and director identification

   Each proposed director obtains a Digital Signature Certificate and, where required, a Director Identification Number so that incorporation forms can be filed and signed electronically with the MCA.

2. 2
   Reserve the company name

   A unique name is reserved through the MCA RUN or SPICe+ Part A facility, ensuring it does not conflict with existing companies or registered trademarks and complies with naming rules.

3. 3
   Draft the constitutional documents

   The Memorandum of Association and Articles of Association are prepared to define the objects, capital structure, and internal governance of the company.

4. 4
   File the incorporation application

   The SPICe+ form along with linked forms for PAN, TAN, and other registrations is filed with the Registrar of Companies together with subscriber and director declarations.

5. 5
   Receive the Certificate of Incorporation

   On approval, the Registrar issues the Certificate of Incorporation with the Corporate Identity Number, after which the company can commence its statutory setup.

Documents required

• PAN and identity proof of all directors and shareholders
• Address proof of directors and shareholders
• Passport for any foreign national director or shareholder
• Proof of registered office and a No Objection Certificate from the owner
• Latest utility bill for the registered office premises
• Digital Signature Certificates of proposed directors

Benefits

• Ability to raise capital from the public and institutional investors
• Limited liability protection for shareholders
• Free transferability of shares improving investor exit options
• Enhanced credibility with lenders, vendors, and the market
• Perpetual existence unaffected by changes in ownership

Frequently asked questions