A Public Limited Company (PLC) is a type of company that can offer its shares to the general public through stock exchanges. It is distinct from a Private Limited Company in its ability to raise capital from the broader public and its more stringent regulatory and compliance requirements. PLCs are governed by the Companies Act, 2013, and are registered with the Ministry of Corporate Affairs (MCA).
Key Characteristics of a Public Limited Company
Separate Legal Entity
Like private limited companies, a PLC is a separate legal entity distinct from its shareholders and directors. It can own assets, incur debts, enter contracts, and sue or be sued in its own name.
Limited Liability
The liability of its shareholders is limited to the unpaid amount on their shares. Their personal assets are protected from the company’s debts and obligations.
Perpetual Succession
A PLC enjoys perpetual succession, meaning its existence is independent of the lives of its shareholders or directors. It continues until legally wound up.
Minimum & No Maximum Shareholders
- Minimum: 7 shareholders.
- Maximum: No upper limit on the number of shareholders. This is a key distinguishing factor, as it allows for widespread public ownership.
Minimum Directors
- Minimum: 3 directors.
- At least one director must be a resident in India (stayed in India for at least 182 days in the previous calendar year).
- At least one Woman Director is mandatory for certain classes of public companies (listed companies or those with paid-up capital of ₹100 crores or turnover of ₹300 crores).
- At least one Independent Director is mandatory for listed public companies.
No Minimum Capital
As per the Companies (Amendment) Act, 2015, there is no minimum paid-up share capital requirement to incorporate a public limited company.
Free Transferability of Shares
This is a hallmark feature. Shares of a public limited company are freely transferable to the public without any restrictions, subject to the rules of the stock exchange (if listed).
Invitation to Public
A public limited company can invite the public to subscribe to its shares and debentures through a prospectus.
Listing on Stock Exchanges
A public limited company can get its shares listed on a recognized stock exchange (like NSE or BSE), allowing for public trading.
“Limited” Suffix
The name of every Public Limited Company must end with the word “Limited”.
Advantages of a Public Limited Company
Ability to Raise Capital from Public
The biggest advantage is the ability to raise significant capital from a large number of public investors by issuing shares and debentures.
Enhanced Credibility & Brand Image
Being a public company often signifies greater transparency, stability, and professional governance, enhancing its brand image and attracting business opportunities.
Liquidity of Shares
Shares are freely transferable and, if listed, can be easily bought and sold on stock exchanges, providing liquidity to investors.
Limited Liability
Protects the personal assets of shareholders.
Perpetual Succession
Ensures continuity and long-term existence.
Growth Potential
The ability to raise large funds and the public trust facilitate faster growth and expansion.
Employee Stock Option Plans (ESOPs)
Can attract and retain top talent through ESOPs.
Disadvantages of a Public Limited Company
Extensive Regulatory Compliance
PLCs are subject to the most stringent and complex compliance requirements under the Companies Act, 2013, and if listed, also under SEBI (Securities and Exchange Board of India) regulations. This involves numerous filings, disclosures, and adherence to corporate governance norms.
Higher Cost of Formation and Compliance
The initial incorporation costs and ongoing compliance costs (including audit fees, legal fees, listing fees, etc.) are significantly higher than other business structures.
Lack of Privacy
Financial statements and other important company information are publicly accessible.
Less Flexible Management
Decision-making processes can be slower due to the larger number of directors, statutory meetings, and procedural requirements.
Greater Public Scrutiny
Faces greater scrutiny from shareholders, media, and regulatory bodies.
Risk of Hostile Takeovers
Being publicly traded, there’s a higher risk of hostile takeovers.
Public Limited Company Registration Process in India (Online with MCA)
The incorporation process for a Public Limited Company is entirely online, similar to a Private Limited Company, using the integrated SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form.
Obtain Digital Signature Certificate (DSC)
- All proposed Directors and subscribers must obtain a Class 3 Digital Signature Certificate (DSC).
Obtain Director Identification Number (DIN)
- Every individual intending to be a director must obtain a DIN. For new companies, DINs for up to three directors can be applied directly within the SPICe+ form (Part A).
Name Reservation (Part A of SPICe+ or RUN service)
- Propose up to two names for the company in Part A of the SPICe+ form. The name must be unique and end with “Limited”.
- Once approved, the name is reserved for 20 days.
Prepare Memorandum of Association (MOA) and Articles of Association (AOA)
- e-MOA (INC-33): Defines the company’s name, registered office state, objects (business activities), liability of members, and capital clause.
- e-AOA (INC-34): Contains the internal rules for the management. These are filed electronically.
- For Public Limited Companies, the MOA must include the subscription clause with at least seven subscribers.
File Integrated Incorporation Form (SPICe+ Part B)
- This is the main incorporation form for a PLC. It covers:
- Company incorporation.
- Allotment of DINs (if applicable).
- Application for company’s PAN and TAN.
- Mandatory registration for EPFO and ESIC (if applicable).
- Opening a company bank account (through AGILE-PRO-S).
- Application for GSTIN (optional).
- Fill in all details, including details of the seven or more subscribers, directors, share capital, etc.
- Attach all necessary documents digitally.
- Pay the prescribed government fees (registration fees, stamp duty on MOA/AOA).
- This is the main incorporation form for a PLC. It covers:
Issuance of Certificate of Incorporation (COI)
- Upon successful verification, the ROC issues the Certificate of Incorporation (COI), which includes the Corporate Identity Number (CIN), PAN, and TAN of the company.
Obtain Commencement of Business Certificate (Form INC-20A)
- After incorporation, a public company must file Form INC-20A (Declaration for Commencement of Business) with the ROC within 180 days of its incorporation. This form declares that subscribers have paid the value of shares they agreed to take, and the company has filed a verification of its registered office.
- A public company cannot commence its business operations or exercise borrowing powers until this certificate is obtained.
Open a Bank Account
- Once the COI, PAN, TAN, and Commencement of Business Certificate are received, open a current bank account in the name of the Public Limited Company.
Documents Required for Public Limited Company Registration (Commonly)
For Directors & Shareholders (Indian Nationals)
- PAN Card: Mandatory.
- Identity Proof: Aadhaar Card, Voter ID, Driving License, or Passport.
- Address Proof: (Not older than 2 months) Bank Statement, Electricity Bill, Telephone Bill, Mobile Bill.
- Passport-sized Photograph: Recent.
For Directors & Shareholders (Foreign Nationals / NRIs)
- Passport: Mandatory (attested by Indian Embassy/Notary in their country).
- Address Proof: (Not older than 2 months) Driving License, Bank Statement, Residence Card, or any government-issued ID containing the address (attested).
- VISA Copy and Entry Stamp: If a foreign national is physically present in India.
For Registered Office Address
- Proof of Registered Office: Rent agreement/lease deed (on stamp paper) or sale deed, and latest utility bill (electricity, gas, or telephone bill, not older than 2 months).
- No Objection Certificate (NOC): From the property owner/landlord.
Other Documents/Information
- Details of the company’s main business activities (objects clause).
- Details of the 7 or more subscribers and their shareholding.
- Nominal/Authorized share capital.
- Subscriber Sheet.
Post-Incorporation & Compliance for a Public Limited Company
Public Limited Companies have the most stringent compliance requirements under the Companies Act, 2013, and SEBI (if listed).
Key Annual/Regular Compliances:
Statutory Meetings
- Board Meetings: Minimum 4 board meetings in a calendar year, with a maximum gap of 120 days between two meetings.
- Annual General Meeting (AGM): Mandatory. Must be held within 6 months of the end of the financial year (first AGM within 9 months of the close of the first financial year).
Annual Filings with MCA
- Form MGT-7/7A: Annual Return, filed within 60 days of the AGM.
- Form AOC-4: Annual Financial Statements, filed within 30 days of the AGM.
Appointment of Auditor (Form ADT-1)
Mandatory.
Directors’ KYC (Form DIR-3 KYC)
Annually for every director.
Statutory Audit
Mandatory for all public companies.
Secretarial Audit Report
Mandatory for certain classes of public companies.
Corporate Social Responsibility (CSR)
Mandatory for companies meeting certain profit/turnover/net worth thresholds.
Income Tax Returns (ITR-6)
Annual filing of corporate tax returns.
TDS/TCS Returns, GST Returns, EPF/ESIC Returns, Professional Tax
As applicable based on business operations.
Maintenance of Statutory Registers & Records
Extensive record-keeping is required.
SEBI Compliances (for Listed Companies)
If listed on a stock exchange, additional and stringent compliances under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are applicable.
Get help for registration from our experts. A Public Limited Company is ideal for large-scale businesses that require substantial capital, plan to list on stock exchanges, or operate with a very broad shareholder base. While it offers immense growth potential, the high compliance costs and regulatory scrutiny require significant resources and dedicated compliance teams.