WHY CHOOSE A PUBLIC LIMITED COMPANY?

COMPANY REGISTRATION IN CALICUT

STARTUP REGISTRATION SIMPLIFIED​

 

When registering a company, Public Company is the most common corporation type, but it isn’t always the top choice for small business owners. Public Company provides limited liability protection to owners, who are called shareholders, meaning owners are typically not personally responsible for business debts and liabilities. Starting a Public Company may also offer greater tax advantages because of an expanded ability to deduct employee benefits, which are most often used by growing businesses and the main advantage is Public Company can easily mobilize funds to conduct business.

Public Limited Company advantages


Starting a Public Company typically provides a number of advantages:

  • Limited liability protection. Owners are not typically responsible for business debts and liabilities.
  • Unlimited owners. Public Company can have an unlimited number of shareholders.
  • Easy transfer of ownership. Ownership is easily transferable through the sale of stock.
  • Unlimited life. When a Public Company owner incurs a disabling illness or dies, the corporation does not cease to exist.
  • Executive Directors take reasonable salaries. Salaries paid to executive directors of Public Company, though taxable to them as salary, are deducted from Public Companies profits for income tax purposes.
  • Owners are not automatically taxed on business earnings. Earnings of a Public Company are not automatically taxed to the owners. They are not taxed to owners if distributed as dividends. The Public Company pays tax on its income at such applicable tax rates.
  • Raise capital more easily. Additional capital can be raised by selling shares of stock.
  • Retained earnings inside the business. A Public Company could successfully retain earnings for reasonable business needs, if it complies with the accumulated earnings tax provisions, instead of distributing them to shareholders.
  • Credibility. Public Company may be perceived as a more professional/legitimate entity than a sole proprietorship or general partnership.
  • Tax deductible expenses. Business expenses may be tax-deductible.

Public Limited Company Registration Procedure

Step1:    Identify a minimum of 7 shareholders and 3 directors:
For registering a public company, a minimum number of 7 shareholders and 3 directors are required; at least one should be an Indian Resident. Shareholders may be individuals, companies or LLPs, but only individuals can become directors of a company. A director need not be a shareholder of the company and shareholders need not necessarily be directors as well.

 Shareholders / Members are the persons holding shares in a company. Directors of company are responsible for the management of the company affairs and legal compliance under various laws. Directors are normally appointed by shareholders. Indian company laws specify that only an individual can be appointed as a director of a company.

Step2:    Obtain a Director Identification Number (DIN) for all proposed directors:
The proposed director must have a DIN allotted by the Ministry of Corporate Affairs. DIN can be obtained by filing an online application with a copy of ID and address proofs. PAN Card is mandatory for Indian nationals for applying a DIN, Passport is enough for the Foreign National. For taking DIN the Digital Signature Certificate is required.

Step3:    Obtain a Digital Signature Certificate (DSC) for directors:
During the registration process, all the documents are submitted to the ROC online through www.mca.gov.in. These forms need to be authenticated by signing it using a Digital Signature Certificate issued by the Certifying Authority in India. Directors of the Company should have a digital signature certificate to authenticate documents that are submitted to the ROC.

Step4:     Identify the location and authorized capital of the company:
It is important to have a proper address for the company's registered office. The address need not be a commercial location for registering a company. It could be the residential address of one of the promoters or any other identifiable address. The ROC will send all the correspondence relating to the company to the registered office address. The jurisdiction of the ROC will depend on the location of the registered office.

Authorized capital can be any amount. Company registration fee varies depending on the authorized capital of the company.

Step5:    Company Name Application:
The name of the company should end with the words 'Limited’. Before proceeding with the incorporation process, an application has to be filed for getting the company name approval from the ROC. It is preferable to submit the application with multiple names in the order of preference. Company name application must be in line with the Company Name Guidelines. Company name application is filed in INC-1 to the Ministry of Corporate Affairs, Government of India, to check the availability of the proposed name for registration of a new company. 

Once approved, the name will be reserved for 60 days. Company registration documents have to be executed and filed within this time line.

Step6:     Execution of company registration documents:
After the company name is approved, the company incorporation documents such as MOA and AOA have to be executed by the promoters in the prescribed format.  

MOA and AOA have to be executed by the subscribers, they have to write all details such as name, father's name, residential address, occupation and the number of shares they agree to take on in their own handwriting. They will then have to sign the document and should enclose the signature of a witness who knows the subscribers.

Step7:     Submission of company registration documents to the ROC:
Once the MOA and AOA are executed, Copy of the same has to be submitted to the ROC of the respective state for the companyregistration. The originally executed MOA and AOA are not required to be filed with the ROC. The same has to be preserved by the promoters for future reference. Along with incorporation documents, details of directors and registered office are also required to be filed with the ROC.

Step8:    Company Registration and Certificate of Incorporation:
The ROC will register the company after due verification of MOA, AOA and other details and will issue the Certificate ofIncorporation (COI). It will also allocate a Corporate Identification Number (CIN) to the company so registered. The COI is now issued by the ROC in digital form with the digital signature certificate. No physical certificate will be issued by the office of ROC. A public company can commence its business after obtaining the COI.

Please find below the check-list of documents and information required for to initiate the process:

  For DIN & DSC (First Stage):

  • PAN card copy of proposed directors attested by a Gazetted Officer or Bank Manager or Post Master. For Foreign National only Passport copy
  • Address Proof copy attested by a Gazetted Officer or Bank Manager or Post Master (Driving license/passport/Voter ID/ Aadhar.) of proposed directors and Promoters.
  • Passport size Photo of proposed directors and promoters(JPG).
  •  Occupation of all Directors
  • E-Mail IDs for all Director
  • Phone Numbers of  all Directors


  For Name Approval:

  • Options for names for the proposed Company (on the basis of preference)
  • A paragraph on the proposed major line of business of the company (main objects)


 Registration of the Company

  • Residence proof address of the Directors&Promoters (Bank Statement, Mobile Bill, Telephone Bill or Electricity Bill) not older than 2 months
  • Registered office address proof (Rent agreement, title deed etc)
  • Utility Bill (Electricity Bill, Gas Bill, Telephone Bill or Mobile Bill) not older than 2 months