What is a Public Limited Company (PLC) Registration?

Introduction

A Public Limited Company (PLC) is a type of company that is limited by shares and offers shares to the public; register a new company in India as a PLC will have many certain tax benefits over others.

Specific prerequisites exist for a company to be registered as a PLC, such as minimum capital requirements, number of shareholders, etc. After a company is registered as a PLC, it can raise funds from the public by issuing shares. PLCs are usually large companies that are listed on stock exchanges. PLCs are governed by the Companies Act, 2013, under section 2(71), laying down the company's rules and regulations and the Securities and Exchange Board of India (SEBI) Act 1992, which regulates India's securities market and protects investors' interests.

Characteristics Of PLC

The list of characteristics of registering a firm as a PLC is as follows:

     * Boards Of Directors and Shareholders

                 * A PLC must have a board of directors consisting of a minimum of three directors.

                 * The directors and shareholders must be natural persons who are not less than 18 years of age.

                 * The directors must have the requisite skills, experience, and knowledge to discharge their duties.

                * A PLC must have a minimum of 7 shareholders with no limit on the maximum number of shareholders.

           *   According to the Amendment Act, 2015, registering a company under PLC doesn’t require any minimum requirement capital.

     * Company Name        

The end name of the company must end with "PLC" or "Public Limited Company". A PLC must have the word "Limited" as its name. A PLC must have a registered office in India.

     *  The Company’s Prospectus

 A PLC must prepare a prospectus before it raises funds from the public. A prospectus is a document that contains all the relevant information about the company, such as the company’s business, financial position, etc.

The prospectus must be registered with the Securities and Exchange Board of India (SEBI). A PLC can raise funds from the public by issuing shares, debentures, or bonds. A PLC must comply with the Companies Act 2013 and the SEBI Act 1992.

     Advantages Of Registering PLC

          * Independent Legal Entity

A PLC is an independent legal entity. It can own properties, enter contracts, sue, or be sued in its name. 

         *  Liability Of Shareholders

They are limited to the amount of capital invested in the company, and the company’s debt is not the liability of the shareholders. 

        *  Long-Term Capital

A PLC can raise long-term capital by issuing shares and debentures. The long-term capital helps the company to expand its business and increase its profits. 

        *   Transferability Of Shares

The shares of a PLC are freely transferable. Shareholders of the respective incorporation can sell their stake to anyone, even to third parties, without permission from the company.

         *   Continuity Of Existence

A PLC has a perpetual succession. The death of directors or shareholder insolvency does not affect the company's continuity.

          *  Multiple Financing Sources

PLCs have access to multiple financing sources, such as banks, financial institutions, and the capital markets. The costs of compliance with the regulatory requirements and listing on stock exchanges are high.

          *  Company With Limited Liability

A PLC is a company with limited liability. This means that the shareholders' liability is limited to the amount of capital invested in the company. This can also protect shareholders from being held liable for the company's debts. 

       *     Expansion Prospects

A PLC can expand its business by issuing new shares. The shareholders may also provide additional capital to the company.  The company can also raise long-term capital by issuing debentures and bonds.  The long-term capital helps the company to expand its business and increase its profits. PLCs have many advantages, such as the limited liability of shareholders, multiple financing sources, and the ability to expand Prospects.

          *  Management

The management of a PLC is responsible for the company's day-to-day running.  The management must comply with the Companies Act 2013.  The management must also disclose the financial position of the company to the shareholders.  The management may also appoint auditors to audit the company's financial statements.