Public Limited Company (PLC) Registration in India:

 

What is a Public Limited Company (PLC)?

A Public Limited Company (PLC) is a legal business structure under the Companies Act, 2013 in India that offers its shares to the general public and is listed on stock exchanges. Unlike a Private Limited Company, which restricts share transfer and ownership, a PLC can invite the public to invest by issuing shares via Initial Public Offering (IPO) or trading on stock exchanges such as the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
The term “Public Limited” means the company must use “Limited” in its name and comply with stricter regulatory norms, transparency, and governance standards.

Key Features and Characteristics

• Public Shareholding: Can offer shares to the public, making capital-raising easier.

• Listed on Stock Exchange: Eligible for listing, increasing visibility and liquidity.

• Separate Legal Entity: Has a distinct legal identity, independent of its shareholders.

• Perpetual Succession: Existence continues regardless of changes in ownership.

• Transferability of Shares: Shares can be freely bought and sold by the public, subject to SEBI rules and bylaws.

• Corporate Governance: Must adhere to strict compliance, timely disclosures, and audit requirements.

• Minimum Number of Directors: At least three directors required.

• Minimum Number of Members: At least seven shareholders required; maximum is unlimited.

• Minimum Capital: No minimum paid-up capital requirement as of 2015 amendment.

• Prospectus Requirement: Must publish a prospectus when raising funds from the public.

• Limited Liability: Shareholders’ liability is limited to their shareholding.

• Annual General Meeting (AGM): Mandatory yearly meetings and public disclosure of financials.

• Strict Regulatory Compliance: Must comply with SEBI, MCA, Ministry of Finance, and other statutory bodies.

Advantages of Public Limited Company

1. Ease of Raising Capital

A PLC can invite investments from the general public by issuing shares. This provides access to large pools of capital for expansion, R&D, acquisitions, and other strategic initiatives. It’s highly suitable for businesses with ambitious growth plans.

2. Liquidity and Share Transferability

Shares of a PLC can be freely traded on stock exchanges, providing liquidity to investors and making it easier for shareholders to enter or exit.

3. Enhanced Credibility and Brand Image

Listing on a stock exchange improves credibility with customers, suppliers, banks, and international partners. This is crucial if you aim to scale regionally or globally.

4. Attracts Institutional Investors

Mutual funds, foreign portfolio investors (FPIs), and insurance companies typically invest only in listed companies. A PLC structure makes your business accessible to these large investors.

5. Limited Liability

Shareholders and directors are not personally liable for company debts; liability is limited to their investment.

6. Employee Incentives

You can offer Employee Stock Option Plans (ESOPs), helping attract and retain top talent.

7. Divided Risk

Risk is spread across a large number of shareholders, reducing the burden on any single investor.

8. Facilitates Mergers, Acquisitions, and Business Combinations

Public companies can more easily engage in mergers, acquisitions, and strategic alliances using shares as currency.

Disadvantages & Challenges

1. Strict Compliance & Regulatory Oversight

Public companies must comply with multiple laws—SEBI, Companies Act, 2013, Listing Agreements, and more. The cost and complexity of compliance are significantly higher than for private companies.

2. Higher Cost of Formation & Maintenance

There are substantial costs for statutory audits, listing fees, share issuance, investor relations, and annual filings.

3. Transparency & Public Scrutiny

Financials, management decisions, and business strategies are subject to public and regulatory scrutiny. This can sometimes make it harder to maneuver in a competitive environment.

4. Risk of Hostile Takeovers

With shares freely tradable, there’s a risk of hostile takeovers if stock prices fall or if shareholders choose to sell en masse to a competitor.

5. Pressure for Short-Term Performance

Listed companies often face pressure from shareholders and analysts to deliver short-term results, which may not always align with long-term strategic goals.

6. Confidentiality

Business sensitive information must be disclosed publicly, which may not be desirable for some entrepreneurs.

Who Should Opt for a Public Limited Company?

A PLC is ideal for medium to large businesses that need significant capital, plan to scale rapidly, or intend to attract institutional investors. It’s less suitable for small businesses or those who value confidentiality and minimal compliance burden.

Minimum Requirements for Registration

• Minimum Three Directors (no maximum limit; one must be resident in India)

• Minimum Seven Shareholders (no upper limit)

• No Minimum Capital Requirement

• Unique Company Name ending with “Limited”

• Registered Office in India (can be residential or commercial)

• Digital Signature Certificates (DSC) for all directors

• Director Identification Number (DIN) for each director

Documents Required

• PAN Card and Aadhaar/Passport/Driving License (ID proof)

• Address proof (bank statement/utility bill not older than 2 months)

• Passport-size photos

• Proof of registered office (rent agreement/NOC/ownership documents)

• Proposed business activity

• Educational qualifications, occupation, and contact details of directors and subscribers

• Draft of Memorandum of Association (MoA) and Articles of Association (AoA)

Step-by-Step Registration Process (Latest: 2025)

1. Obtain Digital Signature Certificates (DSC)

All proposed directors must obtain a DSC for online filings.

2. Apply for Director Identification Number (DIN)

DIN can now be applied for directly through the SPICe+ form.

3. Reserve Company Name (SPICe+ Part A)

Apply for a unique name via the MCA’s SPICe+ portal. Ensure the name does not violate trademark or naming guidelines.

4. File Incorporation Application (SPICe+ Part B)

Complete Part B for incorporation, adding details of directors, subscribers, registered office, and business objects.
AGILE-PRO form is simultaneously filed for GST, EPFO, ESIC, Profession Tax (Maharashtra), and bank account opening.

5. Prepare and File e-MoA (INC-33) & e-AoA (INC-34)

Draft the Memorandum and Articles of Association (MoA & AoA)—either electronically (e-MoA/e-AoA) for up to seven subscribers/directors, or physically signed/notarized/apostilled copies if there are more than seven or if there are foreign subscribers without a business visa.

6. Declaration by Subscribers and Directors (INC-9)

A declaration confirming the accuracy of information is auto-generated and e-submitted (unless more than 20 subscribers/directors or missing DIN/PAN).

7. Upload Forms with DSC Affixed

Convert the SPICe+ and/or supporting forms into PDF, affix DSC, and upload to the MCA portal with the prescribed fees.

8. Certificate of Incorporation & PAN/TAN

Upon approval, you receive the Certificate of Incorporation, PAN, and TAN. EPFO/ESIC/GST/PT registration numbers are also generated if applied for via AGILE-PRO.

9. Bank Account Opening

It is now mandatory to open a bank account at the time of incorporation, using details from AGILE-PRO approval.

10. Issue Share Certificates & Maintain Statutory Registers

Issue share certificates to initial subscribers and maintain statutory registers as per law.

11. Comply with Annual ROC Filings, Hold Board and General Meetings

File AOC-4, MGT-7, conduct AGMs, and maintain transparency as per Companies Act and SEBI norms.

Recent Changes (2020 Onwards)

• No Minimum Paid-up Capital: Start with any amount of capital.

• Mandatory ESIC/EPFO Registration: Introduced in 2020; now part of the integrated SPICe+/AGILE-PRO process.

• Mandatory Bank Account Opening: At the time of incorporation via AGILE-PRO.

• Mandatory e-MoA and e-AoA: For up to seven subscribers; exceptions for foreign entities without DIN/business visa.

• Streamlined Name Reservation: No separate SRN; process is automated within SPICe+.

• Statutory Returns: Only if employee counts cross prescribed thresholds.

Who Can Help? Professional Support from Kyna Fintax

Kyna Fintax, based in Delhi and serving all major Indian cities, provides end-to-end support for PLC registration—from documentation and legal drafting to SEBI compliance, IPO readiness, post-listing governance, and annual filings. Our team of CAs, CSs, and CMAs ensures your compliance journey is smooth, efficient, and tailored to your business needs.