The Company defined under clause 71 of the Companies Act, 2013, a public company which:-

• is not a private company
• has a minimum paid-up capital of Rs. 5 Lakhs or such higher capital as may be prescribed
• is a private company but subsidiary of a public company.

Minimum Requirement to be fulfilled to Form a Public Limited Company

• Seven promoters (shareholders)
• Three directors
• Authorized capital of Rs. 5,00,000
• DIN (Director Identification Number) for all the directors
• DSC (Digital Signature Certificate) for all the directors
• Affidavit for non acceptance of deposits from all the promoters/directors.

Note: The directors and shareholders can be same person

ADVANTAGES TO A PUBLIC LIMITED COMPANY:-

There are a few sizeable advantages to having a public limited company. Limited Liability for shareholders. The business is viewed as a separate legal entity. This means that even if a shareholder(s) leaves the PLC or dies, the business can continue. Ability to raise large amount of capital. Public limited companies are able to raise large sums of money because there is no limit to how many shareholders a PLC can have. The shares of the PLCs are freely transferable. This provides liquidity for shareholders.

DISADVANTAGES TO A PUBLIC LIMITED COMPANY:-

Although there are profitable advantages to forming a public limited company there are some distinct disadvantages.

• There are many legal formalities to starting a public limited company.
• There must be at least 7 shareholders before the PLC can be formed.
• Accounts for PLCs must be filed within 6 months of the year’s end.
• There must be at least 3 directors.
• The company’s secretary must be certified.
• In order to protect public investors, there are many controls and regulations that the business must follow.
• There is a possibility that the original owners can lose control of the public limited company in the issue of a dispute or violation.
• Some public limited companies can grow very large. As a result, many can suffer from mismanagement and slow decision making.

Major Steps involved for incorporation of Public Limited Company:-

• Getting DSC
• Getting DIN
• Name Search and application for Name Availability.
• Drafting of Bye Laws (MOA & AOA)
• Filing of various forms.

Getting DSC

Know About Digital Signature

What is a Digital Signature Certificate (DSC)?

The Information Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. This is the only secure and authentic way that a document can be submitted electronically. As such, all filings done by the companies under MCA21 e-Governance program are required to be filed with the use of Digital Signatures by the person authorized to sign the documents.

Class of DSC

The Ministry of Corporate Affairs has stipulated a Class-II or above category signing certificate for e-filings under MCA21. A person who already has the specified DSC for any other application can use the same for filings under MCA21 and is not required to obtain a fresh DSC.

Required documents for getting DSC:-

• Specified Form filled as per given guidelines
• ID proof of the applicant (Copy of the PAN card should be attested by the Gazetted officer/Bank manager/Post master).
• Address proof (Passport/ Aadhar card/Driving License/Voter Id/ latest Utility Bill like Electricity bill, Telephone bill, Water bill, Gas bill, etc, Property Tax receipt). This needs to be attested by a Gazetted officer/ Bank manager/ Post master.
• Passport size photo(3.5 cm X 2.5 cm)
• Valid Email Id and Mobile No.

Getting DIN:-

The concept of a Director Identification Number (DIN) has been introduced for the first time with the insertion of Sections 266A to 266G of Companies (Amendment) Act, 2006. As such, all the existing and intending directors have to obtain DIN within the prescribed time-frame as notified.

DIN is a unique identification number allotted to an individual who is an existing director of the company or intends to be appointed as director of a company. DIN is an 8 digit number. For example: 02165789.This is allotted by Central Government (office of regional director), Ministry of Corporate Affairs. A private company must have at least 2 directors.

Required documents/information’s for Allotment of DIN:-

• Self attested copy of the PAN Card, the signature must be same as in PAN
• Self attested identity proof of the proposed directors (Voter ID Card/ Valid Driving License/ Valid Passport/ Aadhar Card etc).
• Self attested Address proof of the proposed directors (Latest Bank Statement within 2months Showing current transactions/ Latest Telephone or Mobile Bill/ Latest Electricity Bill etc).
• Passport size color & clear photograph (3.5 cm X 2.5 cm)
• An specified Affidavit by the individual (Declaration by the individual and self attested)
• Educational Qualification
• Current Occupation
• Valid Email Id and Mobile No.
• Signature should be same as in PAN card.

Before you fill-in applications for DIN please remember following common causes of REJECTIONS:-

• Applicant's name and father's name mentioned in abbreviated form: The Name should be expanded even if the ID proof contains the name in abbreviated form.
• Mismatch in the applicant’s name and father's name in DIN form with the ID (Identity) proof enclosed: Any mismatch in name, including spelling mistake, may lead to rejection of application. Minor spelling deviations in the father's name may be accepted, if such deviations do not materially impact the name.
• Prefixes like Mr/ Ms/ Kumari/ Shri/ etc. used in the applicant's name.
• Residence proof(s) like Bank Statements, Electricity Bill, Telephone Bill, Utility bills, etc, submitted are older than 2 months of submitting the application for verification such documents are in the name of some other person, for example father or spouse.
• The supporting documents are not duly attested by the proposed directors.
• Passport/Driving License/Identity proofs/etc attached is expired: Only such documents which are currently valid should be attached.
• The signature is not the same with the signature in the PAN card.

Name Search and application for Name Availability:-

Next step in the formation of a company is the approval of the name by the Registrar of Companies (ROC) in the State/ Union Territory in which the company will maintain its Registered Office. This approval is provided subject to certain conditions: for instance..

• There should not be an existing company by the same name.
• The first word contain a noun and the second word must relate to the main object of the proposed company
• The last words in the name are required to be “Private Limited."
• The application should mention at least two suitable names to maximum 6 names of the proposed company, in order of preference

Once company name is approved, it is valid for a period of sixty days from the date of application, within which time Memorandum of Association (MOA) and Articles of Association (AOA) together with miscellaneous documents should be filed. If one is unable to do so, an application may be made for renewal of name by paying additional fees.

The following information is required for seeking name approval:-

• Proposed name of the company and Alternative names (2 to 6 names)
• Names of the proposed first promoter/ director – minimum 2
• Authorized Share Capital – minimum INR 100000
• Main objects of the company in brief. (In 200 alphabetic words)
• Address of Registered office of the proposed company
• Address of the nearest police station of the proposed registered address of the company.
• NOC if the promoter is carrying on any Partnership firm, sole proprietary or unregistered entity in the name as applied.
• NOC from the person if the proposed name(s) contain(s) name of any person other than promoter(s) or their close blood relatives.
• If the proposed name(s) include(s) the name of relatives then the proof of relationship is also required.

Drafting of Bye Laws (MOA & AOA)

The Memorandum of Association is a document that sets out the constitution of the company. It contains, amongst others, the main objectives, incidental or ancillary objectives for the attainment of the main objectives and the scope of activity of the company and also describes the relationship of the company with the outside world.

The Articles of Association contain the rules and regulations of the company for the management of its internal affairs. While the Memorandum specifies the objectives and purposes for which the Company has been formed, the Articles lay down the rules and regulations for achieving those objectives and purposes. It also states the authorized share capital of the proposed company and the names of its first / permanent directors.

Incorporation Process

I.  After getting the name approval, the MOA/ AOA have to be drafted.

II. Get the subscription sheet of MOA and AOA signed by the subscriber/promoter in his own handwriting with the following details as per the given order:-

• The name of the subscriber
• Father’s name of the subscriber
• Address of the Subscriber
• Occupation of the subscriber

The subscription sheets of MOA must be mentioned the number of shares subscribed by the promoters in numbers as well as words and the passport size photograph of the subscribers must be affixed. The subscription sheets of MOA/AOA must be witnessed by at least one person.

III. Form INC 7

The following information/documents required in INC 7:-

• Finalized MOA/ AOA containing subscription sheets
• Affidavit for non acceptance of public deposit from all the promoters/ directors
• PAN card, address proof, identity proof of all the promoters
• INC 8,9 &10 in specified format

DIR 2  consent of director;- 

• duly digitally signed by promoter/ director

Form INC 22 

      This is a form to be filed by the company informing the ROC the address of registered office of the proposed company  duly digitally signed by one of the director along with a professional.

The following information/documents required in Form INC 22:-

• If property is owned by the proposed director, then;
• Registered proof in the name of the director like latest Electricity Bill, Telephone bill, Gas bill
• NOC from the proposed director to use the premises
• If the property is owned by other than proposed director, then;
• Rent agreement between the land lord and proposed company through its proposed director
• Registered address proof in the name of the landlord like latest Electricity Bill, Telephone bill, Gas bill
• NOC from the landlord to use the premises
• Rent Receipt
• The name and address of the nearest police station of the premises where the company is going to be incorporated 

V.  Form DIR 12

This form states the fact of appointment of the proposed directors on the board of directors from the date of incorporation of the proposed company and that it is digitally signed by one of the proposed directors along with the professional.

The following information/documents required in Form DIR 12:-

• Appointment Letter
• INC 9 and DIR 2 in specified format: Detail of appointment of board of directors
• digitally signed by one of the proposed directors along with the professional

VI. After obtaining the details of Form INC7, INC22 and DIR12, these forms are uploaded on the MCA portal with the respective fees along with the stamp duty of the respective state.

VII. After this, incorporation certificate having CIN (corporate identification number) like U 72900 RJ 2012 PTC 039206 will be obtained.

VIII. The certificate of incorporation will be required while opening the current bank account in company name.

Documents/Information Required During Process 

Following documents/ forms need to be submitted along with requisite fee which is based on the amount of authorized capital as under:-

DOCUMENTS / FORMS REQUIRED AFTER INCORPORATION

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