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What is a Public Limited Company in India?

Definition of a public company is given under sec 2(71). A public company is a company which is not a private company.it has minimum number of member as 7 and there is no as such limit on maximum number of members. Usually public company invites subscription from public to subscribe its share capital. As per sec 149 , A public company should have at least 3 directors however as per sebi(lodr) regulation 2015 the board of directors with effect from April 1 ,2019 shall comprise of not less than 6 directors in top 1000 listed entity and with effect from 1 april 2020 shall comprise of not less than 6 directors in top 2000 listed company.

Public Limited Company is a type of Company with the following features:

➲ Is not a private company

➲ Has a minimum paid-up capital of five lakhs rupees or more

➲ Has a minimum of 3 directors

➲ Has a minimum of 7 shareholders

Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles

It is a form of business which is came into existence through companies act. It is a form of business having separate legal entity from its promoter just like other forms of company. The main advantage of Public limited form of company is that it can raise capital from the public, it can transfer its share from one person to another, and there is more opportunity of growth and expansion under this form of company and many more.

Minimum Legal Requirements

Minimum Legal requirements for incorporating a Public Limited Company:

For incorporating Public Limited form of a company there are certain minimum legal requirements:

➲ Minimum Capital Requirements:

The Minimum paid-up Capital Required for incorporating a public limited company is INR 5,00,000/-. However, there is no upper limited prescribed for the same.

➲ Minimum number of Directors:

A public limited company can be incorporated with a minimum of 3 directors and a maximum of 15 directors.

➲ Minimum Shareholders/Members

A public limited company can be incorporated with a minimum of 7 Shareholders or members. However, there is no upper limit for the number of shareholders in a public limited Company..

Benefits of a Public Limited Company

Public Limited Company form of business is an easy and simple way to get into the corporate world and it is an easy way for a good start-up. It offers the benefit of limited liability to its members whereas a possibility of issuing shares to the public, which is not the case in a private limited company. This form of the company allows you to raise money from the public, you can allot or transfer the shares to the public. It also offers fewer restrictions in terms of transferability of shares as compared to A private limited Company.

➲ Shares are freely transferable and no one’s consent is required for such transfer.

➲The liability of the shareholder(s) is limited to face value of their respective shares

➲ Day to day activities of the Company are not undertaken by the shareholders

➲ Can raise capital from the public

Documents Required for incorporating a Public Limited Company

➲ Mandatory Documents

PAN card of all the shareholders and directors.
Aadhar card of all the shareholders and directors

➲ ID proof of proposed Directors and members (any one of the following):

Passport
Voter’s ID
Driving License

➲ Address proof of proposed shareholders and directors (any one of the following):

Telephone bill
Mobile Bill
Bank statement
Electricity bill

➲ Address proof for the principal place of business of the proposed company (any one of the following)

Utility bill like telephone bill, electricity bill, gas bill, water bill
Rent agreement with rent slip
Proof of ownership

What is a Public Limited Company in India?

Minimum Legal Requirements

Benefits of a Public Limited Company

Documents Required for incorporating a Public Limited Company

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