A Public Limited Company is a company which is not a private company. The minimum number of shareholders and directors required for registering a Public Company is 7 and 3 respectively. Subject to compliance of the Companies Act, there is no restriction as to number of members, issue and transfer of shares and acceptance of deposits. It is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Its main features are:-
1. The company has a separate legal existence apart from its members who compose it.
2. Its formation, working and its winding up, in fact, all its activities are strictly governed by laws, rules and regulations. The Indian Companies Act, 1956 contains the provisions regarding the legal formalities for setting up of a public limited company. Registrars of Companies (ROC) appointed under the Companies Act covering the various States and Union Territories are vested with the primary duty of registering companies floated in the respective states and the Union Territories.
3. A company must have a minimum of seven members but there is no limit as regards the maximum number.
4. The company collects its capital by the sale of its shares and those who buy the shares are called the members. The amount so collected is called the share capital.
5. The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.
6. The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.
7. The shareholders of a company do not have the right to participate in the day-to-day management of the business of a company. This ensures separation of ownership from management. The power of decision making in a company is vested in the Board of Directors, and all policy decisions are taken at the Board level by the majority rule. This ensures a unity of direction in management.
8. As a company is an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders.
Requirements for registration
Step - 1 Apply for Digital Signature Certificate
Digital Signature Certificate for Directors of a Public Limited Company, both Indian and foreigners, are also required to get Digital Signature Certificate - DSC - under the new requirements. Digital Signature Certificate (DSC) is required for all Directors who will require to sign ROC forms or documents. A DSC, like hand written signature, establishes the identity of the sender filing the documents through internet which sender cannot revoke or deny.
Step - 2 Apply for Directors Identification Number (DIN No.)
Directors of Company, must register and get and identification number under the new requirements. It is called Director Identification Number (DIN No.)
Step - 3 Apply for the availability of the name
The next step is to decide the name for the proposed Company to be incorporated. Anyone intending to incorporate an Company has to evaluate his proposed name under the prescribed parameters and make an application in eForm 1A for reservation of the desired name.
The name of the Company shall not be similar or identical with that of a Company or Company already registered in India. The details to be state in the eform 1A are as follows : 1. Six alternative names for the proposed Company. 2. Name, addresses and DIN of Directors 3. Description of proposed business activity.
Step - 4 Drafting the Memorandum and Articles of Association.
On receipt of the name approval letter from the ROC the MOA & AOA required to be drafted. Its Contents include: 1.Name 2.Name of Directors 3.Rights and Duties of Directors 4.Proposed Business 5. Rules governing the Company
Step - 5 File the documents for Registration:
Once, name is allotted ,company registration documents have to be prepared and filed with respective ROC for registration. The following documents and Form filed with After receiving the license / approval an application is to be made to the Registrar of Companies (ROC) along with following documents:1. Printed copy of the Memorandum and Articles of Association., 2.One copy of Form 1, 3.One copy of Form 18, 4.Two copies of Form 32 5.The requisite amount of fees.
After the Registrar is satisfied that all formalities are complied with, he issues a Certificate of Incorporation as to the formation of the Company within a 7 days of filing eForms and will issue a Certificate of Incorporation , which shall be conclusive evidence as to the formation of the Company.
Step - 6 File the documents obtain Commencement of Business Certificate after incorporation:
To obtain Commencement of Business Certificate after incorporation of the company the public company has to make following compliance : 1. File a declaration in eForm 20 and attach the statement in lieu of the prospectus(schedule III) OR 2. File a declaration in eForm 19 and attach the prospectus (Schedule II) to it.
After the Registrar is satisfied that all formalities are complied with, he issues a Certificate of Commencement of Business.
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