FAQs - Public Limited Company Registration in India

For doing business on a large scale, the public limited companies are hugely and exclusively preferred in India or abroad. The public limited companies are exclusively entitled to trade on the stock exchanges and gather massive capital from public investors/depositors. As our well-established and highly prestigious law firm of Delhi offers the full-range of company registration services, expert and efficient services for incorporation of public limited companies in India are essentially provided by our well-informed and veteran company lawyers. To help Indian and global visitors, presented below are fundamental pieces of information related with the public limited company in India.

What is a Public Limited Company?

The Public Limited Company is a wider form of the limited company, which has no restriction on the maximum number of shareholders, listing its shares in the stock market, transfer of shares, and raising funds from public and accepting public deposits; all of these activities cannot be done by a private limited company. Again, unlike a private limited company, a public limited company is governed and managed by a Board of Directors constituted as per the unanimous consent of the shareholders. However, a public limited company has much more compliance burden, as compared to that necessary for a private limited company.

What are the Primary Requirements for setting up a Public Limited Company in India?

For setting up a public limited company anywhere in India, there are required a minimum of Seven Shareholders and Three Directors; the directors can also be shareholders. The requirement of the minimum paid-up share capital worth INR 5 Lac, has been removed by the Companies (Amendment) Act, 2015.

What are the Liabilities of Public Limited Company?

As a public limited company deals with public money, it has to make rather heavy compliances strictly, which are bulkier than those performed by a private limited company. Apart from the regular compliances related with income tax, there are many periodic and annual compliances to be made by a public limited company with ROC/MCA, SEBI, RBI, etc. These regulatory liabilities are in addition to securing and promoting steadily the profits and welfare of all shareholders of the public limited company.

What are the Advantages of Registering a company as Public Limited Company instead of Private Limited Company?

In addition to enjoying all those features and facilities which a private limited company relishes, a public limited company is entitled to go public, issue its shares in the stock market, or accept public deposits. The following are the main and most significant exclusive features of a public limited company:

• A public limited company can have a rather huge magnitude of capital, much more than that gathered by a private limited company.
• It is legally authorized to trade on stock exchanges.
• There is no limit to the maximum number of shareholders in a public limited company.
• The shareholders of a public limited company have limited liabilities, limited roughly to the face value of the shares they own. Again, shareholders do not have to take part in the day-to-day management of the business of the company.
• Shareholders of a public limited company are entitled to transfer their shares freely without needing consent of someone.

What is the most Authentic Process of Registration of a Public Limited Company in India?

There are the following two authentic options for registering a public limited company anywhere in India :

Register the company through filing the Integrated Incorporation Form INC-29, with the MCA.

• Apply for getting approval and reservation of any of the proposed names, through Form INC-1, sent to the Central Registration Centre.
• Filing Form INC-7 for incorporation of the public limited company.
• Filing Form INC-22, Form DIR-12, etc., together with all required documents.

Can an NRI/Foreign National be a director in Public Limited Company? and If Yes, then what are the conditions for the same?

Yes, an NRI or Foreign National can also be a shareholder or director in a public limited company of India. For becoming a director, besides the basic requirement of being a sensible adult, such a person must possess the DIN issued by MCA.