Indian entrepreneurs often start their corporate journey with a private limited company, but the picture changes when they plan to raise equity from the public or list on a stock exchange. Companies like TCS, Infosys, and Tata Motors are examples of public limited companies mainly because they allow free transferability of their shares and have unlimited membership.
Still, the registration of a public limited company is more rigorous as legally the threshold is higher and also compliance requirements are much stricter. This guide will throw some light on how to register and incorporate a public limited company, what kind of papers or forms (documents) are required, and the amount you will get to pay (costs), also the post incorporation changes.
What Is a Public Limited Company Registration?
Following Section 2(71) of the Companies Act 2013, a public limited company is a limited company that is not a private company and whose shares are available for subscription to the public. MCA is the authority for registration of this business entity while a Certificate of Incorporation is issued by the Registrar of Companies.
Once registered, the company gains status as a legal person (separate from shareholders) with limited liability, perpetual succession, and the name of the company ending with “Limited.” One of the major advantages of forming or setting up a public limited company today is that there is no minimum paid-up capital requirement, so even those with little authorization capital can register their companies, and then through public offers or private placements they can raise enough capital.
How Many Directors Are Required for Starting a Public Limited Company?
A public limited company must have at least three directors and not more than the maximum limit. At any time there are fifteen directors in the company, you may increase the limit by passing a special resolution of the company in the shareholders’ meeting. Before the director can join the board, he/she must have a Director Identification Number (DIN) assigned to him or her. The director must be a natural person who is not disqualified under Section 164, Companies Act.
Also, at least one director is expected to have physically resided in India for 182 days in the immediate preceding calendar year. Besides shareholders (minimum seven), a public limited company does not require a director necessarily, but the shareholders may be directors too. If you need assistance with obtaining or changing DIN or adding a director, professional support can simplify the process.
Public Limited Company vs Private Limited Company: How Do They Differ?
Entrepreneurs usually choose between a public limited company or a private limited company after they have thought out the whole business idea because both company forms have limited liability and are separate legal entities.
The biggest difference comes from the business model itself—public limited companies are typically designed to have many shareholders and raise capital from the public. But, private companies are more suitable and better for small and family-owned companies where it doesn’t matter if the shares are not freely tradable. To understand which structure suits your goals, you can compare the benefits of a private limited company against the requirements of public listing.
| Parameter | Public Limited Company | Private Limited Company |
| Minimum members | 7 shareholders, no upper limit | 2 members, maximum of 200 |
| Minimum directors | 3 Directors | 2 Directors |
| Share transferability | Free share transfer | Restricted under the AoA |
| Public issue of shares | Allowed after SEBI compliance | Not allowed |
| Minimum paid-up capital | None after the 2015 amendment | None after the 2015 amendment |
The one-person company would be a good option for a single founder as one does not have to comply with too many regulations, but the big disadvantage of One-Person Company is that these types of companies cannot obtain venture capital investments easily. And, a One-Person Company must convert to a Private Limited Company when its paid-up share capital reaches ₹50 lakh or turnover exceeds ₹2 crore.
In most situations, it is a private limited company that becomes the most favored starting point, while a public limited company would be suitable only if you are thinking about opening a public listing, public investors, or raising major funds through a large institutional investor. If you are weighing options, read our detailed comparison on LLP vs private limited company to make an informed decision.
Procedure for Registration of a Public Limited Company in India
The Registrar of Companies (ROC) brings a simplified online registration process for a public limited. Public limited registration now is easier after the MCA issued the SPICe+ form which integrates several things like company incorporation, company PAN, TAN, etc., into a single form. The procedure for registration of a public limited company has been outlined below in steps:
1. Obtain Digital Signature Certificates
Each aspiring director and the company founders should get their digital signature certificates at Class 2 or Class 3 level from an authorized certifying body like e-Mudhra, NSDL, or Sify. These digital signatures are a requirement for the e-filing of MCA documents.
2. Apply for Director Identification Numbers
The directors can get DIN by filling out the SPICe+ form. DIN is an eight-digit unique identification number and is good to use for life.
3. Reserve the Company Name
If a company name has been proposed, it is necessary that the name is submitted to the official website. SPICe+ Part A shall be used, and the proposed name should be a unique name, business activity, and the limited word will be a suffix. The company secretary of ROC shall cross-check the proposed name in the MCA database and also do a trademark check. For help with choosing the right name, refer to this guide on how to choose the perfect name for your company.
4. Draft and File Incorporation Documents
Prepare a subscriber sheet, MoA (Memorandum of Association), AoA Declaration (INC-9 and DIR-2), and submit the same by SPICe+ Part-B with proof of the office address. ROC will issue the Certificate of Registration with the Company Registration Number (CRN), PAN, and TAN, post the document verification. After registration, you need to appoint the first auditor within 30 days, hold the first board meeting, and also file a notice of office location change (form INC-22). For end-to-end assistance with public limited company registration, Foxtax offers expert guidance at every step.
Public Limited Company Registration Fees in India
The costs related to registering a public limited company in India are composed essentially of a few categories, namely, MCA government fees, stamp duty, professional charges, and DSC costs. The government fees are tied to a specific authorized capital slab, whereas it has been set out in the rule (Companies (Registration Offices and Fees) Rules, 2014) that these fees can range based on the authorized capital. If you plan to increase authorized capital later, additional fees will apply.
As far as the stamp duty is concerned, the levy varies state-wise. Generally, service providers will charge separately for drafting documents, acquiring DSCs, and conducting post-registration formalities if not otherwise stated to the effect. To avoid mistakes here and ensure smooth operation of the establishment of your public company, a professional can be of assistance about estimating the amount of fees right as well as in paying the correct amount state-wise where necessary.
Final Checklist for Public Limited Company Registration
Before going through with your registration as a public limited company, you can use this list as an aid:
- Minimum of seven shareholders and three directors.
- At least one director who is a resident of India.
- Digital Signature Certificates and DIN for all proposed directors.
- A unique company name approved through SPICe+ Part A.
- A registered office in India with proof of address.
- No mandatory minimum paid-up capital requirement.
If you are planning to register a public limited company, Foxtax can handle your paperwork, MCA filings, DSC procurement, and compliance support under one roof. Our company registration experts simplify the entire process so that you can focus on building your business with confidence. We also provide ongoing support through our private limited company annual filing and compliance services to keep your business in good standing.
Frequently Asked Questions
Which is better, OPC or PVT Ltd?
As per the provisions of the Companies Act 2015, OPC is the perfect business structure for a solo proprietor to get the benefit of limited liability without burdening with heavy compliance and the management of the business. Though, the preference of investors in general tends to lie more in the PVT Ltd. structure.
A Private Limited Company will act as an excellent choice of business structure for your team to raise capital, issue ESOPs, or to scale up your business. Only when a venture is ready for having shareholding of public as well as stricter governance should it consider the Public Limited Company. Our guide on OPC registration benefits can help you decide.
Can I register PVT Ltd by myself?
It is entirely valid on an individual’s initiative to do the private limited company registration as long as such person will be filling SPICe+ form and then submitting it via online MCA portal independently. Still, it has its pros and cons, in case one would not take assistance from a professional it would require quite some amount of learning on oneself as far as legal drafting, stamp duty laws, or MCA standards are concerned, that would be a risk to have an application rejected due to such causes.
It is actually more common for people to seek professional help so that on one hand the costly blunders can be prevented and on another hand the registration delay can also be minimized. You can refer to our step-by-step guide for private limited company registration to understand the full process.
How to open a public limited company?
To open a public limited company, one must first ensure that all the directors hold DSCs and DINs, then come up with the reserve name, after that preparing the MoA and AoA of the companies and filing the applications for SPICe+ Part A and SPICe+ Part B on the MCA website, which is an online system.
On the MCA website, the application shall be considered, and if approved, then the Company shall be issued by the ROC a Certificate of Registration bearing the CIN, PAN, and TAN. The company then can carry the necessary formalities after incorporation, which include engaging the services of an auditor through appointment as well as the opening of a current account. For professional handling of your public limited company set up, Foxtax’s experts can manage the entire journey seamlessly.
Is a public limited company government or private?
Although the term suggests so, a public limited company is not necessarily government-owned. A public limited company merely implies that shares shall be sold to the public. It may as well be privately owned, for instance, Reliance Industries and TCS. The mentioned companies come under the category of government companies mentioned under section 2(45) of the Companies Act, where the paid-up share capital of the central government or state government shall not be less than 51%.
What are some well-known public limited company examples in India?
Typical examples of Indian public limited companies are TCS, Infosys, Reliance Industries, HDFC Bank, State Bank of India, Tata Motors, etc. Those companies are also listed on stock exchanges like BSE, NSE, etc. There are a number of unlisted companies that also chose the public limited form for the availability of the transfer of shares.