Public limited company is the largest form of business in India. A public limited company can be listed on stock exchanges and can thus invite funds from public. Also, there is no restriction as to the maximum no. Of shareholders in a public limited company.
There is no restriction on transferability of shares. A shareholder can transfer his shares to any person.
A shareholder is liable only to the extent of unpaid amount on his holding.
A company enjoys separate legal identity unlike partnership firms.
Companies have better avenues for borrowing funds unlike other forms of business.
Public company can invite public to subscribe its shares unlike a private limited company.
A company continues to exist perpetually irrespective of the status of the owner.
Control over the company’s affairs seizes to exist in few hands.
Strict legal formalities and regulations are to be complied with by public limited companies.
Profits of the company are shared amongst many shareholders thereby decreasing each person’s share.
Procedure for Registration
Incorporating a company is now easier and less time consuming with the introduction of INC29 form.
A public limited company is required to have minimum 7sharehodlers.
A public limited company should appoint minimum 3 directors, it can have a maximum of 15 directors.
Minimum capital of Rs.5 lakhs is required to incorporate a public limited company.
ID proof and residence proof of all the proposed directors, PAN card is mandatory for Indian nationals. No objection certificate from the owner of registered office or lease agreement must be produced.
Digital signature is process to authenticate and validate records electronically. DSC is required for every director of the company as the Ministry of Corporate Affairs (MCA) mandates digital signature of directors on some documents.
DIN is a unique identification number which is allotted to all the directors existing or proposed. DIN can be obtained by filing e-form DIN1 in MCA portal.
Any person above 18 years can become a director. Non-residents can also become director of Indian companies
Company’s proposed name should be unique i.e., it should not be identical to any existing name. Names that infringe others’ rights, trademarks or patents are likely to be rejected by ROC.
Authorized capital of a Company is the amount of shares a company can issue to its shareholders. Companies have to pay authorized capital fee to the government so as to be able to issue shares. Companies have to pay authorized capital fee for a minimum of Rs.5 lakh.
Yes, Companies Act 2013 provides rules for converting a private limited company into a public limited company.
Yes, a foreign national can become director of a private limited company. Atleast one director in a company should be resident Indian.
Yes, NRIs / Foreign Nationals / Foreign Companies can hold shares of a Private Limited Company subject to Foreign Direct Investment (FDI) Guidelines.
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