Public Limited Company

Public Company Registration

public company is a corporation wherein the ownership is dispensed to general public shareholders through the free trade of shares of stock over-the-counter at markets or on exchanges. Even though a minute percentage of shares are initially given to the public, the daily trading which happens in the market will determine the worth of an entire company. It is termed as "public" as the shareholders, who become equity owners of the firm, may be composed of any individual who buys stock in the firm.

Public companies are traded publicly within an open market. Various investors buy shares. Mostly, public companies were initially private companies who became public companies to raise capital post complying with all of the regulatory requirements.

*Highlights of a Public Company: *

► Public companies issue shares via an IPO and trades on a minimum of one stock exchange.

► Mostly, private firms go public with an aim to raise capital.

► Many public companies opt to go private for gaining more control over the firm and its decisions.

Minimum 7 shareholders, 3 directors and INR 5,00,000 paid capital is required to form a public limited company.

Benefits of a Public Company:

Raising capital through public issue of shares: The most obvious advantage of being a public limited company is the ability to raise share capital, particularly where the company is listed on a recognized exchange.

Widening the shareholder base and spreading risk: Offering shares to the public gives the opportunity to spread the risk of company ownership among a large number of shareholders. This may allow early investors in the company to sell some of their own shares at a profit while still retaining a substantial stake in the company.

Other finance opportunities : As well as share capital, a public limited company will often find itself in a better position when looking at other potential sources of finance.

The demands of being a public limited company and maintaining a stock exchange listing, for example, can help to improve a company’s creditworthiness when issuing corporate debt (and therefore reduces the return the company needs to offer investors).

Growth and expansion opportunities: The value of being able to raise finance is in how it can be employed to serve the business. By having more finance potentially more readily available and on better terms than a private company, the public limited company it can be in an advantaged position to:

       ► Pursue new projects, new products or new markets

       ► Make capital expenditure to support and enhance the business

       ► Make acquisitions (whether in cash or by offering shares to the shareholders of the target business)

       ► Fund research and development

       ► Pay off existing debt (or replace existing debt with new debt on better terms)

► Exit Strategy: Going public can enhance the options for the founders to exit the business at some point in the future, if they wish to do so. Both higher transferability of shares and the increased visibility of the business and its performance may increase the chances of bid interest from potential suitors.

Documents Required for Public Company Registration:

In India, Private Limited company registration cannot be done without proper identity proof and address proof. Identity and address proof will be needed for all the directors and the shareholders of the company to be incorporated. Listed below are the documents that are accepted by MCA for the online company registration process acceptable.

► PAN Card & Aadhar card of the Promoters/Directors

► Address Proof – Bank Statement/Electricity Bill/Telephone Bill of the Promoters / Directors

► Photo Identity Proof – Voter ID/Driving License/Passport of the Promoter/Directors

► Passport of Foreign Nationals & NRIs if any

► Passport-sized photo of Directors

► Latest utility bill such as gas, electricity, mobile, telephone, Internet clearly depicting the address of the proposed premises

► NOC From the owner of the property in case property is owned by 3rd party or copy of rent agreement in case of rented property

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