What is a

Public Limited Company in India?

A Public Limited Company under the Companies Act 2013 is a limited liability company selling shares to the general public. The shares can be purchased by anyone, whether directly through an initial public offering (IPO) or through listings on the stock market. A Public Limited Company is strictly controlled and is obliged to report its true financial performance to its investors.

Differences between a public limited company and a private limited company:
A Private Limited Company requires at least two or more directors for its formation. On the other hand a Public Limited Company requires atleast seven directors for its formation. The paid up capital in public limited company is 5Lakh whereas in private limited it is 1Lakh. The main difference between public and private limited is, Public limited company is a listed company on a registered stock exchange and the shares are publicly traded. But at the other hand, a private limited company is neither listed on the stock market nor is it traded. It is kept privately by its owners only.

Characteristics of a Public Limited Company

The features of a Public Limited Company can be stated as:

Directors

According to the provisions of the Companies Act, for the establishment of a public limited company in 2013, a minimum of 3 directors are required and there is no limitation on the maximum number of directors.
Prospectus

A prospectus is a concise statement of the operations of a corporation given to the public by a public limited company and a public limited company is required under the Act to file a prospectus.
Limited Liability

The investor of a public limited company shall not be personally liable for any loss or liability of any amount greater than the amount invested by them in the corporation. Nevertheless, this feature of a public limited company does not provide the investors with immunity. Investors will be held accountable for their own illegal activities.
Paid up capital

A public limited company is required to have a minimum paid-up capital of INR 5 lakh or a larger amount as specified by the Act.

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How to start a Public Limited Company in India?

Public limited company registration procedure can be explained as:

Issue of DSC and DIN certificates (Along with self-attested copies of address proof and ID proof)
An application must be produced for the choice of the name of the company.
An application as part of the main object clause of the organization must be made. The object clause determines what will be done by a company after its incorporation.
Submission of an application to ROC alongside documents required such as MOA, AOA, SPICE and AGILE.
Upon receiving approval from the ROC, the company will apply for a 'certificate of commencement of trade.'

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Public Limited Company Compliances

Annual return in the form MGT-7

This form contains the latest information on the directors and shareholders of the public limited company and is to be filed with the relevant ROC within 60 days of the Annual General Meeting (AGM).
Financial Statements in Form AOC-4

This form is to be filed with the applicable ROC within thirty days of the holding of the AGM of the company. Pursuant to the new provisions laid down in the Companies Act of 2013, this form will include the Balance Sheet, the Profit and Loss Account, the Directors ' Report, the Cash Flow Statement, the Auditor's Report and the Consolidated Financial Statement.
Income Tax Returns

This unavoidable form is to be filed with the Income Tax Department before or on 30 September of the subsequent financial year. Once again, the tax audit will be mandatory if the annual turnover of the public limited company is more than INR One Crore.
Secretarial Audit Report in Form MR-3

Every public limited company (listed or unlisted) is required to submit a Secretarial Audit Report along with the Board's Report under any of the following conditions—-a) where its total paid-up capital is equal to or exceeds INR Fifty Crore; or b) its annual turnover is equal to or greater than INR 250 Crore.
Form MGT-14 and MGT 15

MGT-14—This Financial Statement and Director's Report shall be submitted within thirty days of the meeting of the Board of Directors, together with a copy of the meeting of the Board of Directors of the public limited company. MGT-15 includes an exclusive report on the company's Annual meeting (AGM).

FAQs (Frequently Asked Questions)

How many directors are required to incorporate a Public Limited Company?

Minimum of 3 directors are required to establish a public limited company.

What is the capital required to incorporate a Public Limited Company?

The minimum share capital of INR 5 lakh shall be required.

What are the statutory compliances required for a Public Limited Company?

Annual return in the form MGT-7

This form contains the latest information on the directors and shareholders of the public limited company and is to be filed with the relevant ROC within 60 days of the Annual General Meeting (AGM).
Financial Statements in Form AOC-4

This form is to be filed with the applicable ROC within thirty days of the holding of the AGM of the company. Pursuant to the new provisions laid down in the Companies Act of 2013, this form will include the Balance Sheet, the Profit and Loss Account, the Directors ' Report, the Cash Flow Statement, the Auditor's Report and the Consolidated Financial Statement.
Income Tax Returns

This unavoidable form is to be filed with the Income Tax Department before or on 30 September of the subsequent financial year. Once again, the tax audit will be mandatory if the annual turnover of the public limited company is more than INR One Crore.
Secretarial Audit Report in Form MR-3

Every public limited company (listed or unlisted) is required to submit a Secretarial Audit Report along with the Board's Report under any of the following conditions—-a) where its total paid-up capital is equal to or exceeds INR Fifty Crore; or b) its annual turnover is equal to or greater than INR 250 Crore.
Form MGT-14 and MGT 15

MGT-14—This Financial Statement and Director's Report shall be submitted within thirty days of the meeting of the Board of Directors, together with a copy of the meeting of the Board of Directors of the public limited company. MGT-15 includes an exclusive report on the company's Annual meeting (AGM).

What are the rules for picking up the name for a Public Limited company?

As provided for in Section 20 of the Companies Act, 1956, no company shall be identified with an undesired name. The proposed name is known to be unacceptable if it is identical with or too closely similar to the name of a company in nature.

Can NRI/Foreign Nationals be a director of Public Limited Company?

Yes, it is possible for the NRI to be a director of a private limited company. The Companies Act, 2013 allows NRIs, foreigners and foreign nationals, along with PIOs, to become directors of Public limited companies.

Can NRI/Foreigners hold shares of a Public Limited Company?

According to the FDI rules, the shares of the Company may be held by NRI, Foreign National or Foreign Business. Subject to the FDI rules, the shares of the Company may be held by NRI, Foreign National or Foreign Company.