Things required if you are planning to form a Public Company.
Features
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Public
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Governing Authority and law
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Registrar of Companies , Companies
Act 2013
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Formation (Set up)
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Created by Law - Companies act
2013
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Cost of formation
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Minimum Statutory fee for
incorporation of Company is Relatively High
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Ownership - Who will be the Owner?
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Owned by shareholders and managed
by directors
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Admission as partner / member
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A person can become member by
buying shares of a company.
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Cessation as partner / member
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A member / shareholder can cease
to be a member by selling his shares.
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Control & Authority –
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Controls and authorities is vested
in Director, who is responsible for
day to day activities and functioning of the
Public company.
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Nomenclature - Classification /
Defination / Differentiation of Name
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Suffix ‘LTD’ has to be added to
the name
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Legal status of Equity
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Public Limited Company is a
separate legal entity registered under the Companies Act, 2013. The Directors and Shareholders of a
Public Limited Company are not personally liable for the liabilities of
the Company .
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Capital (Raised) from
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More from public through shares
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Existence or Survivability
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A company, being a separate legal
person, is unaffected by the death or other departure of any member but
continues to be in existence irrespective of the changes in membership.
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Minimum Paid-Up Share Capital
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5,00,000
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Members/ Patners/ Shareholders
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7 or more members
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Commencement - WHEN
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Until certificate of Commencement
Is received
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Life Span
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Not Affected
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Registration
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Required
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Registered office
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Required
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Company Secretary
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Companies with paid-up capital Rs
5 cr or more are required to appoint a whole time Company
Secretary. |
Liability of the members
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A limited company grants limited
liability to its owners and management
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Issue of Prospectus (Shares)
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Must Issue
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Shares
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Can be Traded on stock exchange if
the company is listed
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Share transfer
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Yes
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Share Certificate
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Share Certificates are proof of
ownership of shares held by the members in the Company
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Qualification shares
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Sign an undertaking to acquire
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Shares Warrants
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Can issue against fully paid
shares
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Right Issue
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Yes
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Bonus Issue
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Yes
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Debentures
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Yes
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Private Equity
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Yes
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Annual Statutory Meeting
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Public Company must call its
statutory Meeting and file Statutory Report with the Registrar of Companies.
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Board Meeting
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A public limited company must held
a Board Meeting atleast once in every 3 months.
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Maintenance of Minutes
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The proceedings of meeting of the
board of directors / shareholders are required to be recorded in minutes.
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Annual General Meeting
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An Annual General Meeting must be
conducted by the Public Limited Company, once every year.
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Quoram
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Min. 5 members personnaly present
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Designated partner/ Director/
Managing Partner
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Minimum 3 to Maximum15 director
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Principal/Agent Relationship
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The directors act as agents of the
company and not of the members
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Power of Member\ Partner\ Director
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As per AOA
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Book Keeping / Manner of Keeping
Books of Accounts
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accrual basis and according to the
double-entry system of accounting.
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Disclouser
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Mandatory
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Annual Filings
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Public Limited Company must
file Annual Accounts and Annual Return with the Registrar of Companies
each year.
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SubmitTax forms
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Income Tax Return must be filed for the Public Limited Company.
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Submit Profit and loss
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Yes Form 23AC to be filed by all
companies
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External Auditor or Investigators
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External Auditor required to Review financial data
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Available for Public (Books of
Accounts)
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Yes
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Profit
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Profits can be distributed as
dividends to shareholders.
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Loss
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Reserves will be utilised
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Taxation
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Tax rate of 30% on the total
income and surcharge of 5% if the income exceeds 10 Million plus 3% Education
cess & Secondary and Higher Education cess on the total of income tax and
surcharge.
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Credibility
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Enjoys high rate of
creditworthiness
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Dissolution
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Not easy
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Managerial Remuneration
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cannot exceed 11% of the net
profits
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Voting rights
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Voting rights are decided as per the number of shares
held by the members
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compromise/ Arrangements/ Merger /
Amalgamation
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Companies can enter into
Acompromise/ Arrangements/ Merger / Amalgamation sec(390-396)
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Responsibility for
management of business/ Decision making |
the power of decision making in a
company is vested in the Board of director, The shareholders of a company do
not have the right to participate in the day-to-day management of the
business of a company
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Sue & be Sued
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sued in the name LTD Company
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Foreign Direct Investment
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Permissible subject to limits
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Property (Ownership of Assets )
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The company independent of members
have ownership of assets
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Purchase of property
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Can also purchase movable /
immovable property in its name
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Perpetual Succession
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It has perpetual succession.
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Common seal
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Yes
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Memorandum and Articles of
Association \ Partnership deed/ Partnership Agreement
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MOA/AOA
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Rights / Duties / obligation of
Partners / Managing Partners / Directors
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Rights / Duties / obligation of
directors are governed by Companies
act 2013
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Voting Rights for Electing the
Director / Chairman
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Shareholders
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Drawing - Personal Expenses from
company fund
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Not Allowed
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Woman Director
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(Every Listed Company /Public
Company with paid up capital of Rs 100 Crores or more / Public Company with
turnover of Rs 300 Crores or more shall have at least one Woman Director.)
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Whistle Blowing
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As per Sec.177 of the Companies
Act,2013, companies have to
establish Vigil/Whistle-blowing mechanism to report any unethical behaviour or
other concerns to the management
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Contact for more: www.shilpaoswal.website
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