In Guru Movie, Abhishek Bachchan played the role of Gurukant Desai and in this movie, there is a famous dialogue" Ban Na Chahte ho is Desh Ki Sabse badi Company!". In the movie, Gurukant Desai opened the Public Limited Company to take investments from the public in the mode of issue of equity share of the company and invest the money to expand the business. So, We are here to discuss to Why Public Company is Incorporated for Expansion of Business.
A public limited company is the one which is not privately held. The shares of this company can be easily traded between shareholders through stock exchanges and otherwise. The name of a public limited company ends with the word ‘Limited’. This is because the liability of a public limited company is limited to the extent of its shareholder’s capital & company’s assets. In case of default or insolvency, no legal authority can compel a public limited company to sell its directors’ or shareholders’ assets.
Such a company must have a minimum of 3 directors to incorporate the company. Further, there must be at least 7 members to start a public limited company. Though, there is no upper threshold for limiting the highest number of members in a public limited company. Public Company can incorporate at the minimum paid up capital of Rs 1000/-.
This type of corporate model is preferably used by large scale and multinational companies. A public limited company must get itself registered under the Companies Act 2013 to benefit and get benefited by the rules of law.
Step 1: Obtain a Digital Signature Certificate (DSC)
To incorporate any company, there is a long procedure. You have to submit different types of electronic documents and forms at multiple stages of the company registration process. And to authorize these documents, you must have a Digital Signature Certificate (DSC). You can easily obtain a DSC in 1 to 3 working days.
Step 2: Obtain a DPIN
DPIN or Director’s PIN is a unique number obtained by anyone who wants to be a director in one or more companies. One can obtain a DPIN either by filing Form DIN 3 or by filing SPICe (INC 32).
Step 3: Name Approval
There are 2 ways of obtaining name approval for a Public Limited Company:
Through RUN (Reserve Unique Name): RUN is an easy web-based application which lets you submit 2 names at a time with a one-time filing fee. If the name gets approved then it is valid for 20 days only. However, if the application gets rejected, you can re-apply with 2 new name options with fresh filing fees.
SPICe (Simplified Proforma for Incorporating Company Electronically): SPICe is a streamlined, integrated & single point application procedure for obtaining approval for a company’s name, DIN & certificate of incorporation, MOA & AOA as well as allotment of PAN and TAN of the new public limited company. However, under SPICe procedures, only one name can be submitted at a time.
Step 4: Filing of eMOA & eAOA
Once your company name gets approved, you can submit your company’s MOA (Memorandum of Association) & AOA (Articles of Associations) to ROC in electronic forms INC-33 (eMoA) & INC-34 (eAOA). After due verification, your company’s MOA & AOA will get approved. This process may take 7 to 9 days.
Step 5: Issue the Incorporation Certificate
After the approval of MOA and AOA, your company will finally be registered by ROC and they will issue you the certificate of incorporation (COI) of your company digitally along with the digital signature certificate of your company. The certificate consists of details like the company’s name and the date of Incorporation. This procedure may take about 1-5 working days.
Step 6: GET PAN & TAN Applications
After getting companies COI you can submit electronic applications in forms 49A and 49B for obtaining the company’s PAN & TAN numbers respectively. This process may take 1 to 3 working days.
Step 7: Filing Commencement of Business Declaration
Before starting its business, it is a compulsorily for the directors of a public limited to file a declaration stating that all subscribers paid subscription money in a requisite manner within 180 days from the date of incorporation. Post filing of this declaration, you can good to go with your business.
Want to scale your business and getting the funds from the public. Incorporate the Public Limited Company and start the business. For more information, please call us on this number +91 76111 66604 and mail us at compliance@solvesto.in