Public Limited Company

A public limited company offers shares to the general public and has limited liability. Its stock can be acquired by anyone, either privately through Initial Public Offering (IPO) or via trades on the stock market. It is strictly regulated and is required to publish its true financial health to its shareholders.

Characteristics of a Public Limited Company

Name:
Public limited companies must include the word 'limited' after their name. This is a compulsory requirement under the Companies Act. This addition helps differentiate them from other types of companies and signifies that the liability of shareholders is limited.
Directors
According to the Companies Act of 2013, a public limited company must have a minimum of three directors, and there can be a maximum of 15 directors. The directors play a critical role in the management and decision-making of the company.
Limited Liability:
One of the fundamental characteristics of a public limited company is limited liability. Shareholders are only liable to the extent of their investment in the company. This means that their personal assets are protected, and they are not personally responsible for the company's debts or losses. However, shareholders can still be held accountable for any illegal actions they personally commit.
Shareholders:
A public limited company is required to have a minimum of seven shareholders. This broader ownership structure allows for greater access to capital and investment opportunities.
Share Capital:
A minimum authorized share capital of Rs. 1 lakh is required to form a public limited company. This capital represents the total value of shares that the company can issue to its shareholders.
Digital Signature Certificate (DSC):
One of the directors needs to have a Digital Signature Certificate (DSC). This is essential for electronically signing documents submitted to various government authorities during the registration and compliance process.
Director Identification Number (DIN):
Directors of the proposed company must obtain a Director Identification Number (DIN). This unique identification number is a prerequisite for holding a directorial position in any company.
Compliance Documents:
Various legal documents are required, including the Memorandum of Association (MOA), Articles of Association (AOA), and a duly filled Form DIR-12. These documents outline the company's structure, objectives, and governing regulations.
Registration Fees:
Payment of the prescribed registration fees to the Registrar of Companies (ROC) is mandatory. This fee covers the costs associated with the registration and legal compliance of the company.

Requirements to establish a Public Limited Company

Shareholders:
A minimum of seven shareholders is mandatory to initiate the formation of a public limited company. This broader ownership structure enables a wider base of investors.
Directors:
To establish a public limited company, you must have a minimum of three directors. These individuals play a pivotal role in the company's governance and decision-making.
Authorized Share Capital:
A minimum authorized share capital of Rs. 1 lakh is a prerequisite for starting a public limited company. This capital signifies the total value of shares that the company can issue to its shareholders.
Digital Signature Certificate (DSC):
To proceed with the registration, you'll need the Digital Signature Certificate (DSC) of one of the directors. This certificate is essential for digitally signing documents submitted to various governmental authorities during the registration and compliance process.
Director Identification Number (DIN):
Directors of the proposed company must acquire a Director Identification Number (DIN). This unique identifier is a fundamental requirement for holding a directorial position in any company.
Company Name:
The name of the company must comply with the provisions of the Companies Act and Rules. Ensuring a name that adheres to these legal requirements is crucial for the registration process.
Legal Documents:
A set of essential documents must be provided, including the Memorandum of Association (MOA), Articles of Association (AOA), and a duly filled Form DIR-12. These documents outline the company's structure, objectives, and governance regulations.
Registration Fees:
Payment of the stipulated registration fees to the Registrar of Companies (ROC) is mandatory. These fees cover the costs associated with the company's registration and legal compliance.