PUBLIC LIMITED COMPANY
A public limited company grants limited liability to its owners and management. Being a public company allows a firm to sell shares to investors which is beneficial in raising capital. A minimum of three Directors are required for establishing a Public Limited Company and it has more stringent regulatory requirements compared to a Private Limited Company.
Public Limited Companies are those types of companies where minimum number of members is seven and there is no cap on the maximum number of members. A public limited company has most of the characteristics of a private limited company. A public limited company has all the advantages of private limited company and the ability to have any number of members, ease in transfer of shareholding and more transparency. Identifying marks of a public limited company are name, number of members, shares, formation, management, directors and meetings, etc.,
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REASONS TO REGISTER A PUBLIC LIMITED COMPANY
- Separate Legal Entity: Public Limited Company is a legal entity and a juristic person established under the Companies Act. Hence, a company has a range of legal capacities including opening of a bank account, hiring of employees, taking on equity or obtaining licenses and more as an independent corporate entity. The members (Shareholders/Directors) of a company have no personal liability to the creditors of a company for company’s debts.
- Uninterrupted Existence: Public Limited Company has ‘perpetual succession’, meaning uninterrupted existence until it is legally dissolved. A company being a separate legal person, is unaffected by the death or other departure of any member and continues to be in existence irrespective of the changes in ownership.
- Easy Transferability: Shares of a company limited by shares are transferable by a shareholder to any other person. Filing and signing a share transfer form and handing over the buyer of the shares along with share certificate can easily transfer shares.
- Borrowing Capacity: A company enjoys better avenues for borrowing of funds. It can issue debentures, secured as well as unsecured and can also accept deposits from the public, etc. Even banking and financial institutions prefer to render large financial assistance to a company rather than partnership firms or proprietary concerns.
- Owning Property: Private Limited Company being an artificial person, can acquire, own, enjoy and alienate, property in its name. The property owned by a company could be machinery, building, intangible assets, land, residential property, factory, etc., No shareholder can make a claim upon the property of the company – as long as the company is a going concern.
- Copy of Pan card of directors and members: PAN Card for Indian Nationals and affidavit for not having pan for foreign nationals
- Identity Proof of directors and members: copy of Passport/ Driving License/ Aadhar Card/ Voter id card
- Address Proof of directors and members : Copy of Electricity Bill/ Water Bill/ Telephone Bill/ Bank Statement (Not older than 2 months)
- Proof of Registered Office: Copy of Electricity Bill/Telephone bill/ Water bill (Any of these documents shall not be more than 2 months old) and NOC from Land Owner to use premises as Registered Office. Rent agreement if rented.
- Digital Signatures of directors and member: Valid digital sign is required for every member and director.
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FREQUENTLY ASKED QUESTIONS
How many people are required to incorporate a Limited Company?
A Limited Company must have a minimum of three Directors and seven shareholders. Shareholder of the company can be individual or can not be an individual but director of company can be an individual only. one Individual person can be a shareholder cum director.
What are the requirements to be a Director?
The Director needs to be minimum age of 18 years and must be a natural person. There are no limitations in terms of citizenship or residency. Therefore, even foreign nationals can be Directors. However minimum one director of company must be Citizen of Indian.
What is the capital required to start a Limited Company?
You can start a Limited Company with any amount of capital.
Is an office required for starting a Limited Company?
An address in India is required where the registered office of the Company is situated. The premises can be a commercial / industrial / residential.
How long will it take to incorporate a Company?
We can incorporate a Limited Company in 10-15 working days. The time taken for incorporation will depend on submission of relevant documents by the client and speed of Government Approvals. To ensure speedy incorporation, please choose a unique name for your Company and ensure you have all the required documents prior to starting the incorporation process.
How long is the incorporation of the Company valid for?
Once a Company is incorporated, it will be active and in-existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and maybe struck off from the register after a period of time. A struck-off Company can be revived for a period of upto 20 years.