What is the minimum amount to start a Public Company?

Establishing a business requires careful consideration of its legal structure. In India, a popular option for large-scale enterprises is a Public Limited Company (PLC). Governed by the Companies Act 2013, a PLC offers unique advantages and opportunities for growth and investment. In this article, we will delve into the intricacies of a Public Limited Company, its formation, features, and compliance requirements, shedding light on its significance in the Indian business landscape.

Section 2(71) of the Companies Act 2013 defines a Public Limited Company as "a company which is not a private company and has a minimum paid-up share capital of five lakh rupees or such higher paid-up capital, as may be prescribed."

    Formation of a Public Limited Company:

    To establish a Public Limited Company, the following key steps must be undertaken:

  1. Directors: A minimum of three directors is required to form a PLC. These directors must obtain a Director Identification Number (DIN) and Digital Signature Certificate (DSC) from the Ministry of Corporate Affairs (MCA).
  2. Name Reservation: An application for the availability of a company name must be submitted to the MCA. The proposed name should be unique and comply with the naming guidelines provided by the MCA.
  3. Memorandum of Association (MOA) and Articles of Association (AOA): These documents outline the company's objectives, capital structure, internal governance, and other important details. They must be drafted and filed with the Registrar of Companies (ROC).
  4. Capital Subscription: A PLC is required to have a minimum paid-up share capital of five lakh rupees or higher, as prescribed. Shareholders subscribe to the shares of the company by investing in the capital of the PLC.
  5. Minimum number of share holder: Minimum 7 shareholders are required to form a Public Limited Company.

    6. Features and Benefits

  6. Limited Liability: Shareholders of a Public Limited Company have limited liability, meaning their personal assets are protected in the event of company debt or liabilities.
  7. Access to Capital: A PLC can raise capital by issuing shares to the public through initial public offerings (IPOs), rights issues, or private placements. This enables the company to fund expansion plans, research and development, and other strategic initiatives.
  8. Transparency and Corporate Governance: Public Limited Companies are subject to strict regulatory oversight and disclosure requirements. They must maintain transparency in financial reporting, comply with corporate governance norms, and hold regular shareholder meetings.
  9. Transferability of Shares: Public Limited Company shares are freely transferable, providing liquidity to investors and enhancing the company's ability to attract investment.
  10. Credibility and Branding: The "Limited" suffix in the company's name enhances its credibility and trustworthiness among customers, suppliers, and potential business partners.

    11. Compliance Requirements

    Operating as a Public Limited Company entails certain compliance obligations, including:

  11. Filing of Annual Returns: A PLC must file its annual financial statements, director's report, and other relevant documents with the ROC within 30 days from the Annual General Meeting (AGM).
  12. Board Meetings: A minimum of four board meetings must be conducted each year, ensuring active participation and decision-making by directors.
  13. Statutory Audit: A PLC is required to conduct an annual audit by a qualified chartered accountant to verify the accuracy of its financial statements.
  14. Secretarial Compliance: The company must appoint a qualified company secretary to handle legal and regulatory compliance matters.

Establishing a Public Limited Company under the Companies Act 2013 provides numerous advantages, such as limited liability, access to capital, and enhanced credibility. While complying with the necessary legal requirements and adhering to corporate governance norms is crucial, a PLC offers immense growth potential for businesses aspiring to expand and attract investment. By understanding the formation process, features, and

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