Limited Company
Secure Your Business Future with Limited Company Registration - Limited Liability, Unlimited Growth
A Public Limited Company (PLC) is a distinct business structure that offers businesses the advantage of raising capital from the general public through share issuance. It is ideal for medium to large-scale enterprises aiming for rapid expansion and broader access to funding.
At Whytax, we specialize in PLC incorporation services, offering expert guidance through every step—from documentation to post-incorporation compliance. This guide is curated to not only inform but also empower entrepreneurs with essential knowledge about forming a public company in India.
What is a Public Limited Company?
A Public Limited Company is a legal entity that is allowed to offer its shares to the general public, often listed on stock exchanges such as the BSE or NSE. It enjoys a separate legal identity from its owners and has perpetual succession.
Key Features of a Public Limited Company
| Feature | Description |
|---|---|
| Share Issuance | PLCs can issue shares to the public through Initial Public Offerings (IPOs). Shares are freely traded on recognized stock exchanges. |
| Limited Liability | Shareholders’ liability is restricted to the amount invested in shares. Personal assets remain protected. |
| Separate Legal Entity | A PLC is legally independent of its shareholders and directors. It can own property, sue, and be sued in its own name. |
| Perpetual Succession | The company’s existence is unaffected by changes in ownership or death of shareholders. |
| Stricter Regulatory Compliance | Governed by the Companies Act, 2013 and SEBI guidelines. Requires extensive disclosures, board meetings, annual filings, and audits. |
| Minimum Capital Requirement | Requires a minimum paid-up capital of ₹5 lakhs (subject to government amendments). |
| Directorship | At least 3 directors are required, with at least one being a resident Indian. |
| Shareholding | Must have a minimum of 7 shareholders, with no upper limit. |
PLC vs. Private Limited Company (Pvt Ltd)
| Criteria | Public Limited Company | Private Limited Company |
|---|---|---|
| Public Share Issuance | Allowed via stock exchanges | Not permitted |
| Shareholders | Minimum 7, no cap | Minimum 2, max 200 |
| Directors Required | Minimum 3 | Minimum 2 |
| Share Transferability | Freely transferable | Restricted |
| Regulatory Burden | High (SEBI, ROC, Stock Exchange compliance) | Lower compliance burden |
| Capital Raising Ability | Can raise funds from the public | Limited to private funding |
| Disclosure Requirements | Mandatory public disclosures | Minimal disclosure to ROC |
Mandatory Documents for PLC Incorporation in India
To register a Public Limited Company in India under the Companies Act, 2013, several documents must be submitted online through the Ministry of Corporate Affairs (MCA) portal using the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form.
🔗 Basic Document Checklist:
1. Identity & Address Proof (Directors & Shareholders):
o Indian Nationals: PAN card (mandatory), plus Aadhaar/Passport/Driver’s License/Voter ID.
o Foreign Nationals: Valid passport (notarized/apostilled), address proof (bank statement or utility bill, not older than 2 months).
2. Digital Signature Certificate (DSC):
o At least one director must possess a DSC to file online forms.
3. Director Identification Number (DIN):
o All directors must obtain DIN. SPICe+ allows up to 3 DINs at the time of incorporation.
4. Memorandum of Association (MoA):
o Defines the company’s core objectives and scope.
5. Articles of Association (AoA):
o Outlines the internal rules, governance policies, and procedures.
6. Proof of Registered Office:
o Recent utility bill (not older than 2 months), property ownership documents, or rent agreement with landlord’s NOC.
7. INC-9 (Affidavit by Subscribers):
o Declaration confirming they are not convicted or disqualified.
8. DIR-2 (Consent to Act as Director):
o Each director must provide formal consent.
9. Name Approval (RUN or SPICe+ Part A):
o Proposed name must be unique and compliant with naming guidelines. Trademark authorization is required if the name contains a registered brand.
10. For Foreign Companies or Shareholders:
o Certificate of Incorporation (Notarized/Apostilled), Board Resolution, and authorized representative details.
Step-by-Step Process to Register a PLC in India
1. Apply for DSCs of proposed directors.
2. Reserve Company Name via SPICe+ Part A.
3. Fill SPICe+ Part B, including:
o Company structure
o Capital details
o Registered office information
4. Attach required documents (MoA, AoA, PAN, etc.).
5. Pay fees and submit for approval.
6. Receive Certificate of Incorporation along with:
o PAN
o TAN
o CIN (Corporate Identification Number)
Additional Points to Note
• Annual Compliance is Mandatory: Includes board meetings, annual general meetings (AGM), annual return filing (Form MGT-7), financial statements (Form AOC-4), income tax return, and statutory audits.
• Statutory Auditors Appointment: Within 30 days of incorporation.
• Resident Director Rule: At least one director must have stayed in India for 182+ days in the previous calendar year.
• Registered Office Verification: Must be verified within 30 days of incorporation via Form INC-22.
FAQs – Public Limited Company (PLC) Registration in India
1. What is the minimum requirement to register a PLC in India?
• Minimum 7 shareholders
• Minimum 3 directors (with at least one resident in India)
• Registered office address in India
• Minimum paid-up capital of ₹5 lakhs (subject to amendments)
• Valid Digital Signature Certificates (DSC) and Director Identification Numbers (DIN)
2. How long does it take to register a Public Limited Company?
It usually takes 14–20 working days, depending on document accuracy and processing time by the Ministry of Corporate Affairs (MCA).
3. Can a foreign national or NRI be a director or shareholder in a PLC?
Yes, foreign nationals and NRIs can be shareholders or directors in a Public Limited Company, subject to FDI guidelines. However, at least one director must be a resident of India.
4. Is it mandatory to list a Public Limited Company on a stock exchange?
No, listing is not mandatory. A Public Limited Company can be unlisted and still issue shares to a select group of investors. Listing becomes essential only when the company decides to go public through an IPO.
5. What are the ongoing compliance requirements for a PLC?
• Annual General Meeting (AGM)
• Filing of Annual Return (MGT-7)
• Filing of Financial Statements (AOC-4)
• Income tax returns
• Appointment of a statutory auditor
• Regular board meetings and resolution filings
6. Can I convert my Private Limited Company into a Public Limited Company?
Yes, a Private Limited Company can be converted into a Public Limited Company by altering its MoA and AoA, passing board and shareholder resolutions, and filing the required forms with the ROC.
7. What is SPICe+ and how is it used in PLC registration?
SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) is an integrated online form provided by the MCA for company incorporation. It covers name reservation, DIN allotment, PAN/TAN application, and GST registration (optional).
8. Is it mandatory for a PLC to conduct an audit every year?
Yes, all Public Limited Companies must have their accounts audited annually by a Chartered Accountant (statutory auditor). Auditors must be appointed within 30 days of incorporation.
9. What is the role of SEBI in a Public Limited Company?
SEBI (Securities and Exchange Board of India) regulates listed Public Limited Companies. It governs IPOs, stock exchange listing, insider trading, and corporate governance. Unlisted PLCs are primarily regulated by MCA and ROC.
10. What is the difference between an unlisted and listed Public Limited Company?
• Listed PLC: Shares are traded on stock exchanges; must comply with SEBI regulations.
• Unlisted PLC: Not listed on any exchange but can still offer shares privately to a group of investors.
11. What happens if a shareholder wants to exit a Public Limited Company?
In a listed PLC, shareholders can sell their shares freely on the stock exchange. In an unlisted PLC, shares can still be sold or transferred, but subject to company policy and approval.
12. Can a Public Limited Company issue debentures or bonds?
Yes. A PLC can issue debentures, bonds, and other financial instruments to raise funds, subject to approval by the board/shareholders and compliance with SEBI and Companies Act provisions.
13. Are Public Limited Companies allowed to take public deposits?
Yes, subject to strict compliance with Section 73 to 76 of the Companies Act, 2013 and rules made thereunder. PLCs can accept public deposits but must meet prescribed conditions such as:
• Minimum net worth
• Credit rating
• Issuance of circulars and advertisements
• Creation of deposit repayment reserves
14. What is the role of the Company Secretary in a PLC?
A qualified Company Secretary (CS) is mandatory for every listed PLC and certain unlisted PLCs (as per Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014). The CS ensures:
• Legal compliance
• Board meeting coordination
• ROC filings
• Corporate governance adherence
15. What is an AGM and is it mandatory?
An Annual General Meeting (AGM) is mandatory for every Public Limited Company (except newly incorporated companies in their first year). The first AGM must be held within 9 months of the financial year end, and thereafter annually within 6 months of FY closure.
