THREE STEPS FOLLOWED BY NRV & Co.
Introduction
Under the Company Act 2013, a public limited company is one that has limited liability and sells shares to the general public.
Anyone can buy its stock, whether privately, through an initial public offering (IPO), or through stock market exchanges.
A Public Limited Company is governed by tight rules and is obligated to disclose its genuine financial condition to its shareholders.
A public limited company in India can be formed with as few as seven shareholders (also known as subscribers). Individuals or businesses can become subscribers. A public limited corporation can raise share capital to any extent because there is no limit on the number of shareholders it can have. There is no minimum capital requirement anymore, according to a 2013 modification to the Companies Act.
There is a requirement of minimum 3 directors. At least one of such directors must be a resident Indian. Both the directors and subscribers need not be the same person.
Benefits of public limited company
1. Better business opportunities:
The fact that a company is listed on a stock exchange ensures that mutual funds, hedge funds, and other traders are aware of its operations. This may provide the Public Limited Company with more business opportunities.
2. Spreading risk:
Since the shares are sold to the public at large the unsystematic risk of the market is spread out.
3. Capital abundance:
A public limited company's shares are available to the entire public, which implies that anyone can invest. As a result, the company's capital is increased.
4. Growth and expansion opportunities:
Due to less risk, there is a perfect opportunity for growing and expanding the business by investing in new projects from the money raised through shares.
Eligibility criteria
Minimum 7 shareholders
Minimum 3 Directors
Minimum capital requirement is NIL
DSC of the Directors
DIN of the Directors
Required documentations
Passport sized photographs of all the directors
E-Mail ID
Contact Number
Description of proposed business activity
Identity Documents of all the Directors:
Aadhar Card
Pan Card
Passport/National Identity Card (In case of foreigner)
DIN (Director Identification Number) of all the Directors
DSC (Digital Signature Certificate) of all the Directors
Address proof of the premises:
If Rented: The Rent Agreement or Consent letter/No Objection Certificate
If Owned: SMC Vera bill/Light bill (Not older than two months)
Memorandum of Association (MOA)
Articles of Association (AOA).
Features of public limited company
1. Freely transferable:
Due to the ease with which shareholders can exchange shares in a public limited company, they are preferred by both retail and institutional investors.
2. No Capital limitations:
A public limited company is appropriate for capital-intensive businesses with high funding requirements since it can take funds from the general public.
3. Separate Legal Entity:
It is a legal entity that exists independently of its shareholders and directors. As such it can own assets and obligations in its own name.
4. Limited Liability:
Shareholder’s liability is limited to the amount of capital invested by them.
Process
1 Verification of documents
2 Application for Name Approval (online RUN WEB Application on MCA Portal)
3 Obtaining DSC (Class-2) and DIN as required above. However, in new companies DIN can be obtained within SPICe + facility for up to 3 directors
4 Incorporation of company along with filing of e-MOA and e-AOA
5 Filing of Commencement of business certificate after 180 days.