Public Limited Company
A public limited company is a wider form of limited company in which the liabilities of the members are limited. The minimum no. of members required to form a company is 7 with a minimum paid up capital of 5,00,000/-. A public limited company has all the characteristics of private limited company plus some additional features of going public and listing their shares in the stock market.
Advantages of Public Limited Company:
Easy to issue shares
- Public limited company has an added advantage over private limited company to go public and get its shares listed on stock exchange.
Improve Business Credibility
- Public Limited Company is popular and well known business structure. Corporate customers, Vendors and Government Agencies prefer to deal with public company instead of proprietorship or partnerships.
- Public limited company has a better scope for funds. It can borrow in its own capacity from banking and financial institutions. It can also debentures, secured as well as unsecured and accepts deposits from the public. It can get itself registered in stock market and raise capital from there.
Separate Legal entity
- A Public limited company is a separate legal entity from that of its owners. It can own property in its own name and can also incur debts. The members(shareholders/directors) have no liability to the creditors of the company.
- A Public Limited company is unaffected by the death or departure of any member. It is considered as a separate legal entity and continues to remain in existence.
A well defined structure
- Public limited companies are the most favored company as it is well structures with the features of transparency.
FAQ on Public Limited Company:
How many directors are required to form a private limited company?
- A minimum of 2 which cannot exceed 15.
What are the documents required to start a private limited company?
- PAN Card
- ID-proof (Voter ID/Aadhar Card/Driving License/Passport)-Any 1 of
- Address Proof (Electricity Bill/Telephone Bill/Bank Statement)-Any 1
- For Residential Address:
- Rent agreement along with latest rent receipt (in case premises are rented)
- House Tax Receipts (in case premises is owned)
- Electricity Bill
- NOC from the owner (for format)
What is Digital Signature Certificate?
- Digital Signature Certificate (DSC) is an electronic signature, which is in the form of codes. It is used for signing electronic forms, filed with ROC. It cannot be used in physical forms.
What is Director Identification Number (DIN)?
- It is a unique identification no. required to be mentioned in all documents by the director of the company. A director after obtaining DIN shall have to inform the company.
What is MOA and AOA of company?
- MOA mean Memorandum of Association and AOA is Articles of Association. These are the bylaws or rules which defines the object, scope and legal liabilities of the company. Any company registered with Taxoservice, we will be providing a hard copy of MOA and AOA along with a soft copy.
Can the registered address of the company be changed?
- Yes, the registered address can be changed anytime after incorporation.
Does the capital amount have to be deposited in a bank account?
- Yes, a bank account need to be opened after the company is incorporated and the capital need to be deposited within 2 months of incorporation.
How long is the company valid for?
- Once a Company is incorporated, it will be active and in-existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and maybe struck off from the register after a period of time. A struck-off Company can be revived for a period of up to 20 years.
What are the basic requirements for naming a company?
- First ensure that company name is not similar to any other Private Limited, OPC, LLP or Public limited company. Also, do check if your first is not a registered trademark taken by anybody under the IP Act. Also, make sure the name is not too generic; try not to use abbreviations, adjectives. While choosing the name make sure that name should contain the objective of the business like if the objective is consultancy or technology then word is Technology, Technosoft, IT consultancy.
Does PF, Service Tax, VAT is automatically applicable to private limited company?
- No, these are applicable after certain threshold limits are crossed.
What is Certificate of Incorporation?
- This certificate is issued by ROC to document the incorporation of the company. The certificate will record the company name, number and date the company is incorporated.