• Overview

  • Types

  • Eligibility

  • Process

  • Required Document

  • Benifit

  • Compliances

  • Penalties

  • Common Mistake

  • FAQ

Overview

Overview

A Public Limited Company provides an opportunity for businesses to expand and raise capital through public investment. This structure offers limited liability protection to its shareholders, meaning their personal assets are protected beyond their investment in the company. PLCs are required to adhere to high standards of transparency, corporate governance, and regulatory compliance.

Types

Types

  1. Listed PLC: A public company whose shares are traded on a recognized stock exchange.
  2. Unlisted PLC: A public company whose shares are not listed on a stock exchange but can be sold privately.

Eligibility

Eligibility

  1. Minimum Shareholders: At least 7 shareholders.
  2. Minimum Directors: At least 3 directors.
  3. Minimum Paid-up Capital: No minimum capital requirement, but usually varies based on industry norms.
  4. Resident Director: At least one director must be a resident of India.
  5. Registered Office: Must have a registered office address in India.

Process

Process

  1. Name Reservation: Reserve the company name through the RUN (Reserve Unique Name) service on the MCA portal.
  2. Obtain Digital Signatures: Acquire Digital Signature Certificates (DSC) for proposed directors.
  3. Director Identification Number (DIN): Apply for DIN for the directors.
  4. Incorporation Documents: Prepare and file the incorporation documents (MOA, AOA) with the Registrar of Companies (ROC).
  5. Certificate of Incorporation: Receive the Certificate of Incorporation from the ROC.
  6. PAN and TAN Application: Apply for the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
  7. Public Offerings: If the company plans to list on a stock exchange, it must comply with SEBI regulations for public offerings.

Required Document

Required Documents

  1. DIN and DSC of Directors
  2. Identity Proof and Address Proof of Directors and Shareholders
  3. MOA and AOA
  4. Registered Office Address Proof
  5. NOC from the Owner of Premises (if applicable)
  6. Certificate of Incorporation (post-approval)
  7. PAN and TAN

Benifit

Benefits

  1. Access to Capital: Ability to raise capital through public offerings.
  2. Limited Liability: Shareholders’ liability is limited to their investment.
  3. Perpetual Succession: The company continues to exist regardless of changes in ownership.
  4. Credibility: Higher credibility and trust among investors, customers, and vendors.
  5. Transferability of Shares: Shares can be easily transferred.
  6. Growth Opportunities: Facilitates expansion and growth through raised funds.

Compliances

Compliances

  1. Annual General Meeting (AGM): Must hold an AGM every year.
  2. Annual Return: File annual return with the ROC.
  3. Financial Statements: Submit audited financial statements to the ROC.
  4. Statutory Audit: Conduct statutory audits by a certified auditor.
  5. Board Meetings: Hold at least four board meetings annually.
  6. SEBI Compliance: Comply with SEBI regulations if listed on a stock exchange.
  7. Corporate Governance: Adhere to corporate governance norms.

Penalties

Penalties

  1. Non-filing of Returns: Penalties for late or non-filing of annual returns and financial statements.
  2. Non-compliance with SEBI: Penalties for non-compliance with SEBI regulations.
  3. Failure to Conduct AGM: Penalties for not holding the AGM.
  4. Statutory Non-compliance: Penalties for not adhering to statutory compliance requirements.
  5. Fines and Legal Action: Potential fines and legal action against the company and its directors for non-compliance.

Common Mistake

Common Mistakes

  1. Non-compliance: Failing to comply with regulatory requirements.
  2. Improper Documentation: Incomplete or incorrect filing of incorporation documents.
  3. Lack of Transparency: Not maintaining transparency in operations and financial disclosures.
  4. Ignoring Governance: Overlooking corporate governance norms.
  5. Delaying Meetings: Not conducting board meetings and AGMs as required.

FAQ

FAQ

Q: What is a Public Limited Company (PLC)?
A: A Public Limited Company (PLC) is a company that offers its shares to the public and has limited liability. It can raise capital by issuing shares to the public and is regulated by the Companies Act, 2013.

Q: How is a PLC different from a Private Limited Company?
A: A PLC can offer its shares to the public and has stricter regulatory requirements, whereas a Private Limited Company cannot offer shares to the public and has fewer regulatory burdens.

Q: What are the benefits of forming a PLC?
A: Benefits include access to capital through public offerings, limited liability for shareholders, higher credibility, and growth opportunities.

Q: What documents are required to form a PLC?
A: Required documents include DIN and DSC for directors, identity and address proof for directors and shareholders, MOA and AOA, registered office address proof, NOC from the premises owner, Certificate of Incorporation, PAN, and TAN.

Q: What are the common mistakes to avoid when forming a PLC?
A: Common mistakes include non-compliance with regulatory requirements, improper documentation, lack of transparency, ignoring corporate governance, and delaying mandatory meetings.

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