A Public Limited Company offers limited liability to its owners, shareholders and other public related to company. Public Limited Company also have benefits of selling shares to investors. There is no such limit fixed for selling shares it depends on the conditions and circumstances of the company. There must be minimum of 3 Directors to incorporate Public Limited Company. Public Limited Company also have more strict rules and regulations as compared to private. In Public limited company directors have to follow and overcome problems more often.
Public limited company needs minimum of 7 members to start the functioning and there is no such capping or limit on the maximum limit. This can be extended accordingly. Mostly, Characteristics of Public limited company are similar to Private limited company and both company will follow the similar work structure and plans to formulate there plans and to attain goals. Their motive is Profit maximization and social welfare. Advantages and disadvantages of Public limited company are very much similar to Private limited company like Transfer of shareholding, More Transparency.
Public limited company can be identified by spotting their few essential elements that are Company’s Name, Number of members, Shares, Formation, Directors, Meetings Etc.
Procedure for the Incorporation of Public Limited Company
- Digital Signature Certificate (DSC) & DIN:
Firstly, its mandatory for all the directors to attain Digital Signature Certificate and Director Identification Number. Digital Signature is the only secure and authentic way that a document can be submitted electronically. There is no other way to authenticate the document officially. This is valid by all the organization and maintains transparency. All filings of e-forms on Portal are required to be filed with the use of Digital Signatures by the person authorized to sign the documents. Necessary things which are required to obtain it are, Digital Signature application, licensed Certifying Authority along with a self-attested copy of Proof of Identity & Proof of Address. DPIN application is processed and approved by the Central Government. Documents like PAN Card, Identity Proof and other are properly Self-Attested by the directors. At the time of registration, PAN card is mandatory.
- Name Approval:
Name of the company must be unique and should not be offensive for any religion, caste Etc. Name of the company should not be similar to the other company name. Name approval has to be obtained from the Registrar of Companies. The Applicant can give maximum six names in order of preference. The name once approved by the authority is valid for sixty days. The Promoter to the Memorandum of Association and Articles of Association shall be the applicant for the availability of name application. The name once approved by the authority is valid for 3 months. Name approval generally takes 1-2 business days. Promoters can alter or change company name, if needed.
- Memorandum of Association and Articles of Association:
After obtaining name approval and filing Digital Signature Certificate, Memorandum of Association andArticles of Association is written constitution of the company. It involves all the necessary rules and regulation and necessary provision and then filed with the Registrar of companies. Memorandum of association and articles of association of the company shall be signed by each member to the memorandum who shall mention his name, address, description, in the presence of at least one witness who shall attest the signature and shall likewise sign and add his name, address and description. The witness shall be any practicing professional. Memorandum of Association and Articles of Association also have few other documents such as Affidavits, Consent Letters, Certificate of Compliance will be prepared and filed with the incorporation forms.
- Additional Information Required By ROC:
After filing of Incorporation documents, an officer at the Registrar of Company’s office will analyses the application and he may require certain clarifications. Officer is appointed by the Central Government to check the transparency and functioning. These clarifications or enquiry need to be satisfied by the applicant or power of attorney holders in order to get Company incorporated. After resolving all the issues and enquiry officer permits company to get incorporated.
- Certificate of Incorporation:
Once all issues are resolved and clarifications are provided, the Certificate of Incorporation is issued by the Registrar of Companies along with a unique Company Identification Number and the Company is deemed to be incorporated from the date of the Certificate of Incorporation. After issuing certificate, Company may apply for PAN, Bank Account Opening and other tax and regulatory registration as may be required to run the business smoothly. Date of incorporation will be the date from which functioning starts and this identification number is different for every company.
- Bank Account Opening and Remittance of Subscription Money:
After completing all the stages, a Bank Account in the name of newly incorporated Company shall be opened by the Board of Directors and the Subscribers of Memorandum of association and Articles of Association of the Company shall deposit their subscription money in such bank account to help the company raise initial capital to start its business. Bank account avoid confusion in generating funds for better functioning and smooth running of business.
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