Public Limited Company Registration: A Pathway to Large-Scale Business Growth

Introduction

In India’s dynamic economic landscape, businesses that aim for rapid expansion and large-scale operations often find the Public Limited Company (PLC) structure most suitable. Unlike private companies, a public limited company allows raising capital from the general public through shares, which is a powerful advantage for enterprises with significant growth ambitions.

In this blog, we will explore the complete details of public limited company registration, what it is, why it’s important, the documentation involved, and the steps for successful incorporation.

What is a Public Limited Company?

A Public Limited Company is a type of company that can offer its shares to the general public through a stock exchange. It is registered under the Companies Act, 2013 and governed by the Ministry of Corporate Affairs (MCA).

Unlike private limited companies, a PLC must have a minimum of 3 directors and 7 shareholders. There is no upper limit to the number of shareholders. The shares of a PLC are freely tradable, which enhances liquidity and public participation.

Key Characteristics of a Public Limited Company

1. Minimum 3 Directors and 7 Shareholders
2. Free Transferability of Shares: Shares can be traded on the stock exchange.
3. Listing on Stock Exchange (Optional but common): Allows public subscription.
4. Stringent Compliance: Subject to greater transparency, disclosures, and regulatory oversight.
5. Perpetual Succession: Existence is independent of changes in directors or shareholders.

Why is Public Limited Company Registration Important?

1. Access to Public Capital
   Public limited companies can raise huge capital from the public by issuing equity shares. This is a significant advantage for large-scale projects and national/international expansion.
2. Increased Credibility
   Public companies undergo greater scrutiny and compliance, which enhances their reputation in the eyes of investors, customers, and suppliers.
3. Transferability of Shares
   Shares can be freely bought and sold, providing liquidity to shareholders and making it easier to exit or restructure ownership.
4. Stock Market Listing
   A PLC can get listed on stock exchanges like BSE or NSE to increase visibility and trading opportunities.
5. Employee Stock Options (ESOPs)
   Public companies often use ESOPs to attract and retain talent, giving employees part-ownership in the firm.

Who Should Opt for a Public Limited Company?

A PLC is suitable for:

• Large businesses with expansion and funding goals
• Corporations targeting IPO (Initial Public Offering)
• Infrastructure and manufacturing firms
• Businesses looking to go global or set up multiple branches
• Established companies converting from private to public entity

Benefits of Registering a Public Limited Company

1. Large Capital Inflow

The company can raise substantial funds from institutional and retail investors, both domestic and international.

2. Greater Market Exposure

Public companies gain wide publicity, market trust, and customer confidence, especially after listing.

3. Limited Liability

Shareholders’ liability is restricted to their shareholding, protecting personal assets.

4. Exit Options for Founders and Investors

The open market provides a platform for founders and early investors to sell part or all of their holdings.

5. Expansion Opportunities

With more capital and reputation, a public company can expand to new geographies and launch large-scale products/services.

Mandatory Requirements for Public Limited Company Registration

To register a PLC in India, the following requirements must be met:

• Minimum 3 Directors (at least one should be a resident of India)
• Minimum 7 Shareholders
• Registered office address in India
• Valid Digital Signature Certificates (DSC) for directors
• Valid Director Identification Numbers (DIN)
• MOA (Memorandum of Association) and AOA (Articles of Association)

Documents Required

For Directors and Shareholders:

• PAN Card (mandatory)
• Aadhaar Card/Voter ID/Passport
• Passport-size photo
• Address proof (Bank Statement, Electricity Bill, etc.)

For Registered Office:

• Rent agreement or sale deed
• Utility bill (not older than 2 months)
• NOC from property owner

For Company:

• MOA & AOA
• DSC and DIN
• Declaration by directors and shareholders (Form DIR-2, INC-9)

Step-by-Step Process of Public Limited Company Registration

Step 1: Obtain Digital Signature Certificate (DSC)

All proposed directors must obtain DSCs for signing the incorporation documents.

Step 2: Get Director Identification Number (DIN)

DINs are applied through the SPICe+ form (Part B) or through separate DIR-3 filings for existing companies.

Step 3: Name Reservation (RUN or SPICe+)

Choose a unique company name and get it approved by MCA. The name must comply with the naming guidelines under the Companies Act.

Step 4: File SPICe+ Form

This integrated web form includes:

• Company incorporation
• DIN allotment
• PAN/TAN application
• GST, EPFO, and ESIC registration (optional)

Step 5: Draft MOA and AOA

MOA defines the company’s objectives, while AOA outlines operational rules and management structure.

Step 6: Certificate of Incorporation (COI)

Once verified, the MCA issues a Certificate of Incorporation. This includes the Company Identification Number (CIN), PAN, and TAN.

Timeline for Public Limited Company Incorporation

• DSC Application: 1–2 days
• Name Reservation: 2–3 days
• Filing of Incorporation Forms: 3–5 days
• Approval and COI: 7–10 working days in total

Post-Incorporation Formalities

After registration, the company must comply with:

• Opening a bank account
• Appointment of a statutory auditor within 30 days
• Filing of Form INC-20A (Commencement of Business)
• Allotment of share certificates
• Holding of first board meeting within 30 days
• Annual filings with the Registrar of Companies
• Income Tax Returns
• GST registration (if applicable)

For a listed public company, additional SEBI and stock exchange compliances also apply.

Cost of Registering a Public Limited Company

The registration cost depends on state stamp duty, number of directors, and professional services. A rough estimate:

• Government fees: ₹5,000–₹15,000
• Professional services: ₹10,000–₹25,000
• DSC + DIN + PAN + TAN + MOA/AOA filing charges: bundled in most service packages

Total estimate: ₹15,000–₹40,000

Compliance Burden and Challenges

While public companies enjoy numerous benefits, they must follow stringent regulatory norms:

• Quarterly financial disclosures
• Holding shareholder and board meetings
• Annual ROC filings (MGT-7, AOC-4)
• Audit reports
• Corporate governance compliance (for listed entities)

Failure to comply can result in fines, suspension, and even blacklisting of the directors.

Public Company vs Private Company: Key Differences

Conclusion

Registering a Public Limited Company is a strategic move for businesses with large-scale ambitions. It provides unparalleled access to capital, enhances brand image, and ensures business continuity. However, it also comes with a greater responsibility to maintain transparency and follow strict compliance norms.

If your business is ready to grow exponentially, attract investors, or eventually go public via an IPO, then forming a public limited company could be the right choice. With experienced consultants or platforms like Easy Register, the process can be efficiently managed from start to finish.