A public company can be incorporated as listed or unlisted, in which stake of shareholders is on a large scale. Shares of a listed public company can be freely traded on a stock exchange and over the counter market. It can accept deposits from the general public. To protect the stake of shareholders in a public company, the Government has imposed various rules and regulations of different acts on it.
According to section 2(71) of the Companies Act, 2013, a “public company” means a company which is not a private company and has a minimum paid-up share capital, as may be prescribed.
Provided that a company which is a subsidiary of a company, not being a company, shall be deemed to be a private company for the purpose of this Act even where such subsidiary company continues to be a private company in its articles.
WHY INCORPORATE A PUBLIC COMPANY?
- A public company can accept public deposits from the public
- Shares are easily transferable
It can also raise funds through Initial Public Offering (IPO)
PROCESS OF INCORPORATION OF A PUBLIC COMPANY
- Obtain Digital Signature Certificate (DSC) for the proposed director(s): First of all, the basis requirement to incorporate a company is having a DSC as all the filings to the Registrar of Companies are made through an online application system which is appended with a valid DSC.
- Obtain Director Identification Number (DIN) for the proposed director(s): DIN is a unique director identification number allotted by the Central Government to any person intending to be a director of a company.
- Select suitable company name and make an application to the MCA for availability of name: The name of a public company shall end with the word ‘Limited’ and the proposed company name shall comply with the Company Name Availability Guidelines under the Companies Act, 2013.
Capital requirements: There is no minimum capital (authorised or paid up capital) requirement for registering a public company.
Registered office: It is the principal place of business of the proposed company from where it can control its operations.
- Documentation & filing: Documents, such as Memorandum of Association (MOA) and Articles of Association (AOA), need to be drafted, signed and filed electronically, along with the fees applicable.
- Certificate of Incorporation: After scrutiny, the Central Registration Centre (CRC) issues a Certificate of Incorporation.
Generally, it takes 10-15 days from the date of application to get the Certificate of Incorporation from CRC.