Incorporation of a Public Limited Company

Procedure for Incorporation of a Public Limited Company under Companies Act, 2013

Section 2(71) of the Companies Act, 2013, talks about a public company and says that a public company means a company which is “not a private company and has a minimum paid-up share capital, as may be prescribed”[1].

Points to be kept in mind before beginning the incorporation procedure:

1. Memorandum of the company (MOA):

• After the name of the company, “Public limited” should be added.
• If company limited by shares, then liability of members limited to the number of shares they are in possession of.
• The name of the company should not be identical or resemble with that of any other company already registered under the companies act. Additionally, no name can be chosen which identifies with the Central Government, State government or any corporation, i.e. undesirable names.[2]
• It is not necessary that company’s name indicates its objectives for which it is established. However, if there is any specific objective, it can be said out in the name of the company.[3]

2. Articles of the Company (AOA): These regulate the management of the company and they need to be presented by way of forms specified in Table F, G, H, I, J of Schedule I.

3. There need to be at least 7 subscribers to Memorandum of Association of the company.[4]

4. There should be minimum 3 Directors and Maximum 15 Directors.[5] It can have more than 15, by passing a special resolution.

5. One Director needs to reside in India for not less than 180 days in the previous calendar year.[6]

6. All Directors should have valid Director Identification Number (DIN).

Procedure for Incorporation of a Public Limited Company:

1. Name availability: Login to MCA website and fill the online form. E-form INC-1, omitted from Companies Act, 2013 now.

2. Registration of the company:

• Application to be filed with Registrar in whose jurisdiction the company is situated, in E-Form INC-7, with fee.[7]
• Along with this form AOA needs to be signed by each subscriber to the Memorandum.[8]
• A professional (Chartered Accountant, Advocate, Cost Accountant) and the person appointed as Director, Secretary or Manager need to declare that all requirements of the Companies Act, 2013 were met, under Form INC-8.[9]
• Affidavit from each subscriber and First Director that he is not convicted of any offence with respect to promotion, management, formation of the company etc., in Form INC-9.[10]
• Provide subscribers with particulars of the company and documents.[11]

3. Appointment of First Directors: E-Form DIR 12 needs to be file with details:

• Name of First Directors, including surnames
• Residential address
• Nationality
• Director Identification Number (DIN)
• Identity proof etc.[12]

4. Certificate of Incorporation: If Registrar is satisfied with the documents, he will issue a Certificate of Incorporation in Form- INC-11, with a Corporate Identity Number, which will serve as the distinct identity of the company[13].

5. Registered office verification: Verification of the registered office should be filed with the Registrar within 30 days of incorporation of the company, in E-Form INC-22, with fee[14].

Points to be considered after Incorporation of the Company:

1. All copies of information filed for incorporation needs to be preserved and maintained.[15]
2. Within 30 days of incorporation, first board meeting needs to be held, by giving not less than 7 days’ notice.[16]
3. Issue shares to subscribers.[17] And provide subscribers with share certificate within 2 months of incorporation of the company.[18]
4. Within 30 days of incorporation, appoint first Auditors.[19]
5. Paint name of the company outside every office, building etc.[20]

Written By: Anandita Singh

Also Read : INCORPORATION OF COMPANY

[1] Section 2(71), Companies Act, 2013

[2] Rule 8 of Companies (Incorporation) Rules, 2014

[3]Rule 8(2)(b)(ii) of Companies (Incorporation) Rules, 2014

[4] Section 3(1)(a), Companies Act, 2013

[5] Section 149(1)(a) and (b) Companies Act, 2013

[6] Section 149(3) of Companies Act, 2013

[7] Companies (Registration offices and fees) Rules, 2014

[8]Section 7(1)(a) of Companies Act, 2013 read with Rule 13 of Companies (Incorporation) Rules, 2014

[9] Section 7(1)(b) of Companies Act, 2013, read with Rule 14 of the Companies (Incorporation) Rules, 2014

[10] Section 7(1)(c) of the Companies Act, 2013 read with Rule 15 of the Companies (Incorporation) Rules, 2014

[11] Section 7(1)(e) read with Rule 16 of Companies (Incorporation) Rules, 2014

[12] Section 7(1)(f) and 7(1)(g), read with Rule 17 of Companies (Incorporation) Rules, 2014

[13] Section 7(2) and 7(3), read with Rule 18 of the Companies (Incorporation) Rules, 2014

[14] Companies (Registered offices and fees) Rules, 2014 read with Rule 25 of the Companies (Incorporation) Rules, 2014

[15] Section 7(4) of Companies Act, 2013

[16] Section 173 of the Companies Act, 2013

[17] Rule 5 of Companies (Share Capital and Debentures) Rules, 2014

[18] Section 56(4)(a) of the Companies Act, 2013

[19] Section 139(6) of the Companies Act, 2013

[20] Section 12(3)(a) of the Companies Act, 2013