Scaling Up: Key Requirements to Become a Public Limited Company in India
For businesses with ambitious growth plans, becoming a Public Limited Company is a major milestone. Unlike a Private Limited Company, a Public Limited Company can raise funds from the general public through IPOs or by issuing debentures, making it ideal for companies aiming for large-scale expansion.
However, this increased access to capital comes with stricter regulations and compliance requirements. Understanding the legal framework and the steps involved in setting up a Public Limited Company in India is crucial for a smooth transition.
What is a Public Limited Company?
Under the Companies Act, 2013, a Public Limited Company:
- Is not a private company.
- Allows free transferability of shares (with some restrictions).
- Can invite the public to subscribe to its shares or debentures.
- Has no prescribed minimum paid-up share capital after the Companies (Amendment) Act, 2015.
Many assume all Public Ltd Companies are listed on a stock exchange, but that’s not always the case. A company can be an unlisted public company and still comply with the rules for public companies without being traded on the stock exchange.
Key Requirements to Become a Public Limited Company in India
- Minimum Members and Directors
- At least 7 shareholders and 3 directors are mandatory.
- Digital Signature Certificate (DSC) and Director Identification Number (DIN)
- All directors must have a DIN and a Class 3 DSC for e-filing.
- No Minimum Paid-Up Share Capital
- Earlier ₹5 Lakhs was required; now, no minimum capital is mandated.
- Unique Company Name
- Must end with the word “Limited” and be approved by the MCA via RUN or SPICe+.
- Memorandum of Association (MOA) and Articles of Association (AOA)
- Define company objectives and internal management rules.
- Registered Office Address
- Proof of address and NOC from the property owner required.
- Prospectus or Statement in Lieu
- If inviting public capital, issue a Prospectus; otherwise, file a Statement in Lieu.
Compliance and Regulatory Obligations
Public Limited Companies face stricter compliance than Private Limited Companies:
- Regular board meetings and detailed disclosures.
- Annual filings with MCA.
- Statutory audits and compliance with SEBI regulations for listed entities.
Why Professional Assistance Matters
Due to complex documentation, e-filing, and compliance requirements, expert help is essential. At ProCS Legal, we provide:
- End-to-end incorporation services.
- Drafting of MOA and AOA.
- Compliance support for IPO readiness.
Final Thoughts
Becoming a Public Limited Company can unlock immense growth opportunities but requires careful planning and compliance. With the right legal partner, the process is smooth and efficient.
Ready to register your Public Limited Company? Contact ProCS Legal for expert assistance today.
