Public Limited Company (PLC)
A public limited company (PLC) is the legal designation of a limited liability company (LLC) that has offered shares to the general public and has limited liability.
A company whose securities are traded on a stock exchange and can be bought and sold by anyone. Public companies are strictly regulated, and are required by law to publish their complete and true financial position so that investors can determine the true worth of its stock (shares). Also called publicly held company.
Benefits of Public Limited Company (PLC)
Shares are offered to the general public at large i.e. anyone can invest in a public limited company. Hence, improves capital of the company.
Being listed on a stock market ensures that mutual funds, hedge funds and other traders take note of business of the company. This may result in better business opportunities for the Public Limited Company.
Since the shares are sold to the public at large the unsystematic risk of the market is spread out.
Growth and expansion opportunities
Due to less risk, there is a perfect opportunity for growing and expanding the business by investing in new projects from the money raised through shares.
Requirements/Process for registration of Public Limited Companies
There are various rules and regulations prescribed under the companies act, 2013 for the formation of a public limited company. Here is what you should keep in mind when registering a public limited company:
- Minimum 7 shareholders are required to form a public limited company
- Minimum of 3 directors is required to form a public limited company
- The minimum share capital of Rs. 5 lakhs is required
- Digital signature certificate (DSC) of one of the directors is needed while submitting self-attested copies of identity and address proof
- Directors of the proposed company will need a DIN
- An application is required to be made for the selection of the name of the company
- An application comprising the main object clause of the company is to be made. This object clause will define what a company will pursue after its incorporation
- Submission of the application to ROC along with the required documents like MOA, AOA, duly filled Form DIR – 12, Form INC – 7 and Form INC – 22 is needed
- Payment of the prescribed registration fees to the ROC is required
- After obtaining an approval from the ROC, the company should apply for the ‘certificate of business commencement.’
Documents Required for Public Limited Company (PLC)
- Proof of identity of all the shareholders and directors
- Proof of address of all the directors and the shareholders
- PAN number of all the shareholders and directors
- Utility Bill of the proposed office i.e. proposed registered office for the company
- A NOC (No Objection Certificate) from the landlord where the office of the company will be situated
- Director Identification Number (DIN) of all the directors
- Digital Signature Certificate (DSC) of the directors
- Memorandum of Association (MOA)
- Articles of association (AOA)