What is a Public Limited Company?
A Public limited company is a voluntary association of persons who legally form a body corporate having LIMITED liability to its management and shareholders, its shares are freely transferable and easy to acquire but other regulatory compliance are more stringent as compared to a private limited company as incorporated in India under The Companies Act, 2013.
In a general trend in India, Limited companies are not formed initially in the majority they are converted from private to the public after achieving certain milestones, as per latest MCA database in September (2020) approximately 16000+ Companies incorporated in India out of which only 300+ Public Limited companies are registered.
In Comparison, to a private limited company in India, a public limited company must have minimum 7 members and at least 3 directors to get legally registered in India but no minimum capital requirement is prescribed under the act.
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Define Public Limited Company?
As per the Companies Act, 2013 Section 2 (71) “public company” means a company which—
(a) is not a private company
(b) has a minimum paid-up share capital
Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for this Act even where such subsidiary company continues to be a private company in its articles;
How to Register a Public Limited Company in India?
| Name Reservation | In latest web-based e-form Spice+ Part A, an applicant can apply 2 names simultaneously for reservation of name of a Public Limited Company. A brief about the Main activity of the proposed limited company is required to be submitted along with the name application. Prescribed fee for this Form is Standard Rs. 1000/- which contains 2 re-submission. |
| DSC | An Activity related to MCA cannot begin without the digital signature of an Individual for filing. Digital Signature of Each Director is required for DIN application. |
| Incorporation | Post Approval of Name applicant is required to Complete the Procedure within 20 days of Name Approval Certificate. To Register a Company on MCA Portal a Professional need to Prepare Main Objects and Articles of the Company along with requisite Information and Attachments in Spice+ Part -B. Following is the list of Mandatory Documents for Limited company Registration. Copy of PAN of each Director and Subscriber.Copy of Aadhar of each Director and Subscriber.Latest Address proof of Every Director and Subscriber.Latest Utility Bill of Registered office and NOC from the owner.Signed Copy of Form DIR -2 from directors.MOA and AOA. |
| Filing of E-forms | Web-based Spice+ e-form shall be filed after attaching DSC of director & Certification from CA/CS/CMA in Practice. Filing Fee for Company Registration on MCA is Zero but requisite Stamp Duty is payable as per State Stamp Laws also the mandatory fee for PAN & TAN is also payable. |
| Commencement of Business | To legally commence Business activity as stated in the object clause, Board of Director are required to file e-form INC-21A within 180 days of Incorporation. This form is introduced to bound a company for opening bank account and deposit of Capital contribution as stated in MOA. Bank Statement of Newly Incorporated Company is required to be attached in this form and a Certificate is generated after successful submission of this E-form which is not generated in case of Private companies. |
Checklist of Mandatory Compliances by a Public Limited Company Post Incorporation.
| ADT-1 | Every Company is required to appoint Statutory Auditor of the company within 30 days of its Incorporation. If the Board fails to appoint the same it must be appointed by its members in general meeting. It is not necessary to file ADT-1 of the first director as per Section 139. |
| MPB-1 and DIR-8 | Every Director must submit its Disclosure of Interest in First board meeting of the company and in every first board meeting of the company of the financial year, The prescribed form for the same is MBP-1 and DIR-8. |
| MGT-14 | Apart from Special Resolution/Ordinary Resolution a Public Limited company is required to file MGT-14 for the adoption of Annual accounts and Board Report. The e-Form is required to be filed within 30 days of Board Meeting in which Accounts and Board report is adopted. |
| AOC-4 | Financial Statements and Board Report is Submitted by filing e-Form AOC-4 within 30 days from the date of AGM of the Company. |
| MGT-7 | Annual Return of the Company is Filed in e-Form MGT-7 within 60 days from the date of AGM. |
| Statutory Records | Apart from filing e-Forms, Every Public Limited is required to Maintain Minute Book of each Board meeting or General meeting held and Statutory Registers According to Companies Act, 2013. |
| ITR-6 | Annual Income Tax Return is filed by these Companies as per Income Tax Act, 1961. |
Aforementioned Compliances are applicable on every Public limited company, in case a Company is Limited as well as listed on any or both Stock exchanges i.e. NSE or BSE then LODR (Listing Obligation and Disclosure Requirement are Simultaneously applicable on it.
Before moving further, we must have a quick view about listed companies which represents that a public limited company whose shares or any other security is listed on any stock exchange will be called as Listed Company.
Shares of these companies are freely available for trading to the public as a retail investor and securities of these companies are regulated by SEBI as a Market Regulator, being under the purview of dual obligations, compliances of these companies are more stringent.
Checklist of Mandatory Compliances by a Listed Company as per SEBI-LODR
Majority of Quarterly reporting and compliances are based upon reports received from RTA of the company (Registrar and Transfer Agent) who is responsible for keeping records of transactions of the investor.
| Compliances to be done twice a Year | ||
| Regulation | Purpose | Time Frame |
| Regulation 7 (3) – | Compliance Certificate certifying maintaining physical & electronic transfer facility. the listed entity shall submit a compliance certificate to the exchange, duly signed by both that is by the compliance officer of the listed entity and the authorized representative of the share transfer agent, wherever applicable, within one month of the end of each half of the financial year, certifying maintaining physical & electronic transfer facility either in house or RTA as applicable. | Within one month of the end of each half of the financial year (i.e. 31st October & 30th April) |
| Regulation 40 (9) – | Certificate from Practicing Company Secretary (PCS) the listed entity shall ensure that the share transfer agent and/or the in-house share transfer facility, as the case may be, produce a certificate from a practising company secretary (PCS) within one month of the end of each half of the financial year, certifying that all certificates have been issued within thirty days of the date of lodgment for transfer, sub-division, consolidation, renewal, exchange or endorsement of calls/allotment monies. | Within one month of the end of each half of the financial year (i.e. 31st October & 30th April) |
| Compliances to be done 4 times a Year | ||
| Regulation | Purpose | Time Frame |
| Regulation 13 (3) – | Statement of Investor complaints. the listed entity within twenty-one days from the end of each quarter shall file on Stock exchange a statement giving the number of investor complaints pending at the beginning of the quarter, those received during the quarter, disposed of during the quarter and those remaining unresolved at the end of the quarter | Within twenty-one days from the end of each quarter (i.e. 21st July, 21st Oct, 21st Jan, 21st Apr) |
| Regulation 27 (2) – | Corporate Governance. a quarterly compliance report on corporate governance within fifteen days from close of the quarter. Further, it may be noted that it shall not apply, in respect of – (a) the listed entity having paid-up equity share capital not exceeding rupees ten crore and net worth not exceeding rupees twenty-five crore, as on the last day of the previous financial year: | Within 15 days from the quarter-end (i.e. 15th July, 15th Oct, 15th Jan, 15th Apr) Not Applicable on SME – Listed Entities. |
| Regulation 31 – | Shareholding Pattern A Shareholding Statement of each class of security within the following timelines – one day before the listing of its securities on the stock exchange(s);every quarter, within twenty-one days from the end of each quarter;within ten days of any capital restructuring of the listed entity resulting in a change exceeding two per cent of the total paid-up share capital | Within twenty-one days from the end of each quarter (i.e. 21st July, 21st Oct, 21st Jan, 21st Apr) Half-Yearly Applicable on SME Listed entity. This report is filed in XBRL format. |
| Regulation 33 – | Financial Results Every Listed entity is bound to disclose its financial results quarterly to Stock Exchange within 45 days of Closure of the quarter along with Limited Review Report. But In case of Forth Quarter i.e. 31st March the results are to be submitted within 60 days from the closure of quarter because in the last quarter company is required to submit quarterly as well as annual results as audited by the statutory auditor of the company. Statement on Impact of Audit Qualifications (applicable for audit report with a modified opinion(s)) or declaration (applicable for audit reports with unmodified opinion(s) shall also form a part of annual results of an entity listed on the recognized stock exchange. Financial Results are Submitted in machine-readable PDF’s as well as in XBRL format available on the stock exchange. | Within 45 days from quarter end except for 4th Qtr. (i.e. 14th Aug, 14th Nov, 14th Feb, 30th May) Half Yearly Applicable to SME- Listed Companies. XBRL Results on Stock Exchange are different from ROC XBRL reporting as for these reports no particular software is required for filing. |
| SEBI- DP Reg.55A | Reconciliation of Share Capital Audit. A Quarterly Report for reconciliation of shares held at depositories will be submitted to the stock exchange by company. The Report is to be Certified by the Practicing Chartered Accountant or Company Secretary. The report is required to be submitted to the stock exchange within 30 days from the end of the Quarter. | Within 30 days from the quarter-end (i.e. 31st July, 31st Oct, 30th Jan, 30th Apr) This report is submitted in XBRL format. |
| Compliances to be done once Year | ||
| Regulation | Purpose | Time Frame |
| Regulation 34 – | Annual Report | A Copy of Annual Report shall be submitted to the stock exchange within 21 days of the Annual General Meeting every year. |
Apart from the aforementioned Mandatory compliance Public Limited Company, there are some event-based compliances which are reported via holding board meeting:
- Intimation of Board Meeting for considering material decision must be intimated 5 working days of the board meeting.
- Every Intimation for Board meeting regarding approval of financial results shall be accompanied by notice for closure of trading window for that period.
- The outcome of every essential board meeting must be upload on the stock exchange within half n hour of the board meeting.
- Notice of General Meeting must be uploaded before 21 days of the meeting.
- Financial results of the listed companies must be published in the newspaper in English as well as in vernacular language except for SME listed companies.
- Voting results of a general meeting must be informed to the stock exchange within 48 hours of closure of the meeting.
- Change in management is also required to be uploaded within 48 hours of such an event.
- Audited financials are only uploaded annually on the stock exchange other financials are uploaded unaudited with limited review report.
- Audit Committee and Nomination and Remuneration Committee is mandatory for every listed company to be formed with a majority independent director.
- Secretarial Audit and Internal Audit are compulsory for Listed Companies irrespective of the capital or turnover requirement.
- Company Secretary, as well as compliance officer, is mandatory in case of listed entity whereas both the roles can be performed by the same individual.
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