way2registration | Public Limited Company

What is a Public Limited Company?

A Public Limited Company (PLC) in India is a business entity that offers its shares to the public through a stock exchange. Governed by the Companies Act, 2013, a PLC is suitable for larger enterprises seeking to raise capital from a broad range of investors. It provides the advantages of limited liability and a formal corporate structure while enabling the company to access substantial funding through public offerings.

Public Limited Company

Three DIN

Three DSC

Name Approval Application

Drafting MOA & AOA

Incorporation Certificate

PAN

TAN

Get Started ₹ 18,999/-(All Inclusive)

COMPARISONS

Features of Public Limited Company

Key Features of a Public Limited Company
● Share Capital: Unlike private companies, PLCs can issue shares to the public through Initial Public Offerings (IPOs) and further public offerings. This allows the company to raise significant capital from a wide array of investors.● Limited Liability: Shareholders in a PLC enjoy limited liability, meaning their personal assets are protected from business liabilities, as their liability is limited to the amount unpaid on their shares.● Separate Legal Entity: A PLC is a separate legal entity from its shareholders, capable of owning property, entering into contracts, and participating in legal actions in its own name.● Transferability of Shares: Shares in a PLC are freely transferable and can be bought or sold on the stock exchange, providing liquidity for investors and flexibility in ownership changes.● Regulated Governance: PLCs are subject to stringent regulatory oversight and corporate governance norms, ensuring transparency and accountability in their operations.
Taxation of Private Limited Companies in India
● Tax Rate: Private limited companies are taxed as separate legal entities. The corporate tax rate is 30% on profits, with an additional surcharge & health and education cess as per current tax laws. Small companies with turnover up to INR 400 crore benefit from a reduced tax rate of 25%.● Income Tax Filing: Private limited companies must file their income tax returns annually using Form ITR-6. They are required to maintain accurate books of accounts and get them audited if the turnover exceeds INR 1 crore.● Goods and Services Tax (GST): Companies with an annual turnover exceeding the GST registration threshold (INR 40 lakhs for most states, INR 20 lakhs for special category states) must obtain GST registration and comply with GST filing requirements.● Tax Deductibility: Companies can claim various business expenses as tax-deductible, including salaries, rent, utilities, and depreciation. Proper documentation is required to substantiate all deductions
Registration Process for a Private Limited Company
● Obtain Digital Signature Certificates (DSC): Directors and the company secretary (if applicable) must obtain digital signature certificates, which are necessary for filing documents electronically.● Apply for Director Identification Number (DIN): Each director must apply for a Director Identification Number from the Ministry of Corporate Affairs (MCA). This unique number is required for managing company affairs.● Choose a Company Name: Select a unique name for your company and ensure it complies with MCA naming guidelines. The name should be distinct and not resemble any existing company or trademark.● Draft the Memorandum and Articles of Association: Prepare the Memorandum of Association (MOA) and Articles of Association (AOA), which outline the company’s objectives, governance structure, and internal regulations.● File Incorporation Documents: Submit the incorporation documents to the Registrar of Companies (RoC) through the MCA portal. This includes the MOA, AOA, DIN, DSC, and other necessary documents.● Obtain Certificate of Incorporation: Upon processing your application, the RoC will issue a Certificate of Incorporation, confirming the establishment of your company.● Open a Bank Account: Open a company bank account using the Certificate of Incorporation, MOA, AOA, and PAN card.
Allied Compliances for Private Limited Companies
● Annual Filing: Private limited companies must file annual returns (Form MGT-7) and financial statements (Form AOC-4) with the RoC. These filings should be completed within prescribed deadlines to avoid penalties.● Maintain Books of Accounts: Companies are required to maintain accurate books of accounts and records. These records must be audited annually if the turnover exceeds INR 1 crore.● File Income Tax Returns: Companies must file their income tax returns annually and ensure timely payment of any advance tax. Non-compliance with tax regulations can result in penalties and interest.● Compliance with GST: If registered for GST, companies must file GST returns periodically and adhere to GST compliance requirements, including maintaining detailed records of all transactions.● Hold Board Meetings and Annual General Meetings (AGMs): Private limited companies are required to hold board meetings and AGMs regularly. The minutes of these meetings must be documented and filed with the RoC.● Update Information: Any changes in the company’s registered office, directors, or other significant details must be updated with the RoC to ensure accurate records.● Secretarial Compliance: Maintain compliance with the Companies Act, 2013, including statutory registers and filings. Appointing a company secretary may be mandatory depending on the company’s size and structure.
Is a Private Limited Company Right for You?
A private limited company is well-suited for businesses seeking limited liability protection, a formal corporate structure, and the ability to raise capital through private investments. It is ideal for startups, growing enterprises, and businesses looking to establish credibility and enhance operational efficiency.
Before establishing a private limited company, consult with legal and financial professionals to ensure it meets your business needs and complies with all regulatory requirements.
Understanding the fundamentals of a private limited company, including taxation, registration, and ongoing compliance, will help you build a solid and compliant business foundation in India.

PUBLIC LIMITED COMPANY

COMPARISONS

Features of Public Limited Company

Registration Process for a Private Limited Company

Allied Compliances for Private Limited Companies

Is a Private Limited Company Right for You?

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