Q.1 What is a Public Limited Company?
The Public Limited Business is a broader version of the limited company, which does not limit the maximum number of shareholders, listing its shares on the stock market, transfer shares and fund raising from public funds and taking public deposits. Again, a public limited company is regulated by and run by a board of directors formed according to unanimity among its shareholders, as opposed to a private limited corporation. However, as comparison to that essential for a private limited business, a public limited business does have significantly greater compliance load.
Q.2 What are the Primary Requirements for setting up a Public Limited Company in India?
A minimum of seven shareholders and three directors are necessary to establish a public limited company anywhere in India, and shareholders may also be the directors. In accordance with the Companies Law (Amendment) 2015, the minimum paid-up share capital of INR 5 Lac was abolished.
Q.3 What are the Liabilities of Public Limited Company?
As a limited public corporation works with public funding, it must closely comply with the requirements that are more voluminous than those carried out by a limited private business. In addition to normal income tax compliance, a public limited company with ROC/MCA, SEBI, RBI etc. has various periodic and yearly compliance. In addition to ensuring and continuously promoting the profits and welfare of all public limited company shareholders, certain regulatory obligations are also applicable.
Q.4 Can NRIs/Foreign Nationals be a Director in Public Limited Company
Yes, after receiving Director Identification Number, NRI or Foreign National can become Director of the Public Limited Company. However, at least one director on the board of directors must be a resident of India.
Q.5 How can a subsidiary of a Foreign Company be incorporated as a Public Limited Company in India?
A copy of the Board decision of the Holding Firm approving the investment in the proposed Indian Company and permitting a person to sign the incorporation papers on behalf of the company, fully signed by the official of the Indian Embassy in the foreign nation where the registered office is located, is also required to be attached with the documents in the case of a wholly owned subsidiary.
Q.6 Does the director of a Public Limited Company have any obligations to pay off the creditors of the company?
No, because a business is a limited liability business, a member’s responsibility is limited to the face value of the shares the member holds. He is under no obligation to contribute anything to the company’s creditors after paying the full face amount.
Q.7 Can a shareholder of company involve in business and management of a Company?
A company’s shareholders do not have the right to engage in the day-to-day management of the company’s operation. This guarantees that ownership and management are kept separate.
Q.8 Who is the ultimate person governing a Public Limited Company?
The Board of Directors has decision-making authority in a firm, and all policy decisions are made at the Board level using the majority rule. This assures that management is moving in the same direction.
Q.9 What is the difference between authorized capital and paid-up capital?
The approved capital is the capital limit set by the Registrar of Companies up to which shares can be issued to members or the general public. The paid-up share capital is the portion of the capital subscribed for by the shareholders that has been paid.
Q.10 Is it mandatory for a Director to be in India for registration of a Public Limited Company?
No, it is not necessary for a Director to be present in India to create a company. He may delegate Power of Attorney to another individual to sign documents on his behalf. After the company is formed, he can nominate Alternate Directors to act on his behalf if he is unable to go to India. A Board meeting is required within the first month of the company’s establishment, and additional directors might be appointed on his behalf at that meeting. For this purpose, the director who is now residing outside of India will be present for the smooth running of the proceedings.
Q.11 What is the term “Further Issue of shares “means?
In the case of a public business, the firm might offer additional shares as right shares to its current owners. The offer is subject to current shareholder approval and must be accepted by the public at a general meeting. It is important to highlight that additional shares cannot be granted to the Directors or any individual individual; they must be made public and approved in a public general meeting.
Q.12 Why to go for Public Limited Company?
- Simple funding from investors or through a company’s initial public offering (IPO).
- Public limited company shares are easily transferrable.
- There is a high level of openness in the firm.
- Best for long-term company vision.
- Highly recognisable.
Q.13 How much time will it take to register a public limited company?
It usually takes 15-18 working days once all the documentation are submitted. However, it might take up to 18-25 days depending on the state of registration, as each state has its own Registrar of Companies (ROC) to create a public limited company.