Governed by the provisions of the Indian Companies Act, 2013, a Public Limited Company is formed by the association of persons with a minimum paid up capital of 5 lakh rupees. Transferability of shares has no restriction. The company can invite public for subscription of shares and debentures. The term public limited is added to its name at the time of incorporation,
The minimum number of members required to start a public limited company is seven, the principal reason for choosing a public company is to have the ability to offer shares to the public.
Difference between Private Limited Companies and Public Limited Companies?
Point of Difference
|Private Limited Company||Public Limited Company|
|Transferability of Shares||
Shares cannot be issued to the Public
|The shares can be issued to the public|
|Minimum and Maximum Members||Minimum - 2 Maximum - 200||Minimum - 7 Maximum - unlimited|
|Minimum Directors||2 directors||3 directors|
|Minimum Paid-up Capital||2 lacs||5 lacs|
|Minimum Subscription||Can allot shares without completing minimum subscription.||Cannot allot shares without completing minimum subscription.|
|Certificate of Commencement of Business||Not Required||Required|
|Invitation to public||Not allowed||Allowed|
|Issue of Prospectus||Not Required||Mandatory|
|Term used at the end of the name||Private Limited||Limited|
|Statutory meeting||Not Mandatory||Mandatory|
|Managerial Remuneration||Cannot increase 11 percent of Net Profit.||No Restriction|
Public Limited Company
To obtain the Certificate of Commencement of Business after incorporation of the company, the public company has to make either of the following compliances File a declaration in eForm 20 and attach the statement in lieu of the prospectus (schedule III)
File a declaration in eForm 19 and attach the prospectus (Schedule II) to it.
We need DSC for filling of e-forms on online portal of MCA as the Ministry has provided for online registration procedure for company incorporation and other applications. DSCs are issued by the Certifying Authority in a token form and are valid for 1 or 2 years.
Documents required for DSC
It is an 8 digit unique number with a lifetime validity assigned by Ministry of Corporate Affairs to any person intending to be a Director or an existing Director of a company. Whenever a return, application or any information relating to the company is submitted by a director, the DIN needs to be clearly mentioned on the same.
It is a legal document required at the time of company formation. It is license to form a company, issued by the State Government.
Known as the Company Charter, Memorandum of Association (MOA) and Articles of Association (AOA) define scope of work of a company and its internal management.
The MOA contains the following
Central Board of Direct Taxes has come together with Ministry of Corporate affairs to provide Permanent Account Number (PAN) and Tax deduction Account Number (TAN) in one day. Applicant Companies can submit a common application form SPICe (INC 32) on the MCA Portal.