Public Limited Company Registration in Bhopal, Madhya Pradesh – Features, Difference, Process, Eligibility Criteria, Benefits, Disadvantages, Documents Required

Overview of Public Limited Company registration in Bhopal, Madhya Pradesh

Starting a business of your own may be a huge accomplishment for you to finally gather courage & take a leap of faith in the right direction regardless of its scale of operations. But, you would want to ensure that you choose a business structure that could offer maximum benefits for you and you might want to look for options to choose from. Accordingly, if a business entity will need huge capital investments, may opt to be registered as a Public Limited Company in Bhopal, Madhya Pradesh.

But, what is a Public Company? As per Section 2(71) of the Companies Act, 2013 a Public Company means a company that is not a private company. Further, a private company that is a subsidiary of a Public Company shall be deemed a Public Company.

In other words, a Public Limited Company is a company that doesn’t meet the definition of a private company i.e. it has at least seven members and at least three directors on its board and there is no upper ceiling for the maximum number of members as in the case of a private company.

Incorporation of a Public Limited Company with the Ministry of Corporate Affairs online portal grants legal recognition as well as affords all other privileges that are allowed to a body corporate such as limited liability, perpetual succession & a separate legal status. Not only this, a Public Limited Company is permitted by the law to raise capital from the public in general by listing their shares in a public stock exchange in India as well as from abroad.

However, since there is a larger amount of public interest involved in a Public Limited Company, it is often subject to more stringent compliances with many of the restrictive provisions of the Companies Act.

Public Limited Company in Madhya Pradesh

Located in Central India, Madhya Pradesh is the second-largest state in terms of area and 5th largest state in terms of population. Madhya Pradesh shares its borders with Uttar Pradesh, Chhattisgarh, Gujarat, Rajasthan, and Maharashtra. Till 2000 Madhya Pradesh used to be the largest city in India in terms of area, but in the year 2000, Chhattisgarh was carved out and designated as a separate state, making it the second-largest state after Rajasthan. Madhya Pradesh has the 10th largest economy in India, and it ranks 23rd among the states in the State Human Development Index. The state is rich in mineral resources and has India’s largest diamond and copper reserves.
The primary source of income in Madhya Pradesh is agriculture, meaning the state has an agrarian economy. The state’s major crops are soybean, wheat, gram, maize, rice, sugarcane, cotton, rapeseed, mustard, and arhar. Madhya Pradesh consists of five Special Economic Zones (SEZs), of which three are IT-related, mineral-based, and agro-based. For doing excellent work in Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005, Madhya Pradesh has won the 10th National Award.
Capital- Bhopal

Business ideas in Madhya Pradesh
Madhya Pradesh is the second most preferred state for the corporate and industrial business after Gujarat. If you want to set up a small business that needs low investment in Madhya Pradesh, then here are a few ideas: –

Food processing business
Madhya Pradesh is an agrarian state with wheat, soybean, gram, sugarcane, rice, maize, mustard, etc., the major crops in the state. Setting up a food processing business in Madhya Pradesh is a good idea as it is an agrarian state. People cannot consume raw food, so it needs to be processed for consumers’ consumption. The food processing business requires considerable investment but will raise huge profits. Being an agricultural state Madhya Pradesh is an ideal state for the food processing business.

Minerals related business
Madhya Pradesh has a unique geographical location as it is centrally located and shares the border with six states with rich mineral resources. Madhya Pradesh is a mineral-rich state with tremendous potential for various mineral-related businesses. Depending on the capital that you have for the investment, you can start any minerals-related business in Madhya Pradesh. It is counted among the states with diamond mines, so you can also establish a diamond cutting and polishing business in Madhya Pradesh. Mineral-related business requires moderate investment depending on what kind of business you are choosing.

Agro-related business
Being the fourth-largest producer of agricultural products in India, Maharashtra is perfect for establishing an agro-related business. Madhya Pradesh ranks first in soybean, gram oil, seeds, pulses millets, and linseed production. Agriculture is one of the top contributors to the state’s economy, and 74% of the population is directly or indirectly dependent on agriculture. So raw materials required for agriculture-related business will be locally available to you in the state. Some agri-related businesses you can start in Madhya Pradesh are fertilizers, organic farming, organic grocery stores, orange farming, etc. This business will require low investment, and you must give a lot of energy and effort in the initial years of establishing the business.

Tourist agency
Madhya Pradesh has four UNESCO World Heritage sites that attract tourists around the globe. The state has many forts, palaces, archaeological sites, stupas, monuments, etc., so setting up tourism-related businesses like restaurants, tourist agencies, and transport businesses will help you make huge profits. The best part about the tourism-related business is that it needs low investment.

Cement business
Setting up a cement industry in Madhya Pradesh is a profitable business idea as the state is the third-largest cement producer in India. It is known for the rich cement-producing minerals, so the raw materials required for establishing a cement manufacturing plant will be locally available in the state. Prominent groups like Vikram cement, Prism Cement, Diamond cement, Birla Corporation, ACC Cement, and Mahiar cement have established their manufacturing plants in Madhya Pradesh.

Textile business
Known for the production of Chanderi and Maheshwari sarees, Madhya Pradesh is famous for textiles. The textiles, especially the handicraft produced in Madhya Pradesh, reflect the state’s rich culture and tradition. Again, the raw materials that are needed for the production of textiles are locally available. Textile business in Madhya Pradesh needs reasonable investments and a lot of effort.

The startup ecosystem of Madhya Pradesh
According to the state startup ranking 2019, Madhya Pradesh is entitled as the emerging startup ecosystem. Madhya Pradesh is called the heart of India and attracts a lot of investment in diverse sectors like engineering electronics systems, information technology, design, and manufacturing. In 2016 the state government of Madhya Pradesh outlined the startup policy with a vision to encourage entrepreneurial spirit and innovation among the state’s youth. This startup policy of Madhya Pradesh is known as the ‘Madhya Pradesh incubation and startup policy.’ The policy was formulated under the department of Micro Small and Medium Enterprises (MSME) and was updated in 2019. Following are the objectives of the Madhya Pradesh startup policy: –
The Madhya Pradesh startup policy vision is to strengthen the startup culture by inculcating and nurturing entrepreneurial skills in the people.
The motto of the policy is to encourage and inspire youth to develop innovative ideas to build a strong startup ecosystem.
By outlining the startup policy, the state government of Madhya Pradesh wants to promote entrepreneurship activities, particularly among the youth, by enabling sustainable and inclusive socio-economic development across the state.
Through the startup policy, the state government of Madhya Pradesh aims to promote and develop employment opportunities, thus eradicating unemployment within the state.
The state vision is to build a robust startup ecosystem by encouraging the setting up of new technology businesses and incubation centers.

Salient Features of a Public Limited Company registered in Bhopal, Madhya Pradesh

Number of Directors

Unlike a One Person Company or a private limited company, the primary requisite for starting a public limited company which will need at least three directors with no upper ceiling for the maximum number of directors.

Body Corporate

Since a Public Limited Company is a body corporate it enjoys limited liability, perpetual succession, and a separate legal status apart from its members in the eyes of law. Accordingly, in the event of debts or losses, the liability of any member could not go beyond his agreed contribution which is unlike in the case of a partnership firm or a sole proprietorship firm where the partners and business owners are jointly and severally liable for the debts of the business.

Paid up Capital

To start a Public Limited Company, there must be a minimum paid-up capital of Rs. Five or any higher amount prescribed by the Government under the Act.

Addition of word ‘Limited’ with name

Unlike a private company, which adds a ‘private limited’ after its name, every Public Limited Company must add ‘Limited’ after its name in every official publication.

Difference between Private & Public Limited Company registered in Bhopal, Madhya Pradesh

There are several differences between a private & Public Limited Company registered in Bhopal, Madhya Pradesh which have their own advantages & disadvantages in each of them. Hence, every entrepreneur may choose their business structure before establishing their company by analyzing each concept in depth. The primary differences have been provided below-

Process of Public Limited Company Registration Online in Bhopal, Madhya Pradesh

Step 1-Obtain DSC for the proposed Company in Bhopal, Madhya Pradesh

As a first step towards registration in Bhopal, Madhya Pradesh, the company should first obtain a class 3 category digital signature certificate from a government-recognized certifying authority available online, which takes around one or two days. DSC is the most important part of filling incorporation application online with MCA as it enables the company to e-verify its documents & attachments online.

Step 2- Make an application for allotment of DIN in Bhopal, Madhya Pradesh

Next, at least three directors of the proposed directors of the Public Limited Company will be required to obtain DIN to become directors of the company. Basically, there are two ways to apply DIN from the MCA portal-

i. File a separate application for DIN allotment through DIR-3 in Bhopal, Madhya Pradesh

The Form DIR-3 is an e-form filed for the purpose of making an application online for the allotment of DIN for a single individual director who wishes to become a director in an existing company. To file this form, proof of identification such as PAN, Aadhaar Card, etc, and address proof of the proposed director are required.

ii. Apply for DIN through the incorporation form SPICe+ in Bhopal, Madhya Pradesh

From 23.02.2020, the proposed director of a new company who is going to become a director for the first time could apply for DIN allotment within the SPICe+ form for up to three directors and doesn’t need to file the form separately.

Step 3-File the multipurpose form SPICe+ for incorporation in Bhopal, Madhya Pradesh

The SPICe+ form for the incorporation of a new company which came into effect on 23 February 2020, is a multi-purpose web-based application that not only facilitates the incorporation of the company but also offers facilities in two parts A & B for –

• Application for allotment of DIN (up to three directors)
• Reservation of company name (RUN)
• Application for PAN and TAN (mandatory)
• Application for EPFO registration (mandatory)
• Application for ESIC registration (mandatory)
• Application for Professional tax registration (for Maharashtra only)
• Application for opening a bank account (mandatory to file)
• Allotment of the GST identification number (GSTN)

To start the process of incorporation, all these e-forms have to be downloaded in PDF format, filled & signed digitally, and submitted online. Further, the user has also to download & fill SPICe+ form and affix a digital signature followed by a certification of the fulfillment of all compliances from a professional such as CA/CS or CMA. There is no fee applicable for the incorporation of a company with less than 10Lakhs of authorized capital.

Step 4- Filling & Submission of MOA & AOA in Bhopal, Madhya Pradesh

Next, the proposed company needs to file the drafted Memorandum of Association (MOA) & the articles of association (AOA) of the company in e-format. Memorandum & Articles of Association which represent the primary charter of the company as well as its bye rules for internal organization. The format for MOA & AOA has been prescribed in the form e-MoA (INC-33) and e-AoA (INC-34) respectively. After putting digital signatures by the subscribers to the Memorandum and Articles of Association, they could be submitted.

Earlier, the MOA & AOA needed to be filed physically, but now these have also been integrated with the incorporation form SPICe+.

Step 5-Approval & Getting COI in Bhopal, Madhya Pradesh

After submission of the SPICe+ form along with all required documents & attachments, the MCA authority will carry out verification of the documents & on being assured of its genuine, may issue the Certificate of Incorporation which contains a unique CIN number along with PAN & TAN number & other unique identification numbers as allotted after approval of the SPICe+ Form by way of an email on the registered e-mail address.

Eligibility Criteria for Public Limited Company Registration in Bhopal, Madhya Pradesh

i. Minimum amount of shareholders & directors- To start a Public Limited Company, the company needs to have at least seven members who subscribe to the Memorandum of Association of the company and at least three directors on its board. Though, there are no restrictions regarding the maximum number of directors or members a Public Limited Company can hold.

ii. Resident Director-The another requirement to start a Public Limited Company in India is having at least one resident director i.e. who has resided for at least 182 days during the immediately preceding year irrespective of their citizenship, who will be primarily responsible for the compliance of the company. It is to be noted that the number of days required for the calculation of 182 days could be in phases.

iii. Registered Office Address-Every Public Limited Company should have a temporary address at the time of registration of the company for communication purposes. Further, within a period of 30 days, the company needs to have a registered office address and proof of address must be submitted online.

iv. Unique Name of Company– For the purpose of eligibility, the company so proposed should be unique i.e. it should not be too closely similar to any already existing business and should not be a name in violation of the National Emblems Act 1950. The name of the company should suggest its business objectives which could be either a single objective or a multifaceted object.

v. Legal Object– The proposed company shall also have a legal object of business for its incorporation and not for any illegal purpose or posing any not misuse or harm the society, which should be described in the object clause of the Memorandum of Association (MOA) of the company.

vi. DIN for all Directors- As provided under sections 153 and 154 of the Companies Act, 2013, the Director Identification Number is a unique number mandatorily required to be obtained by a director in a company by making an application to MCA in e-form DIR-3.  However, for a first-time director for a new company, an application for DIN allotment could be made along with the incorporation form SPICe with MCA.

vii. Digital Signature Certificate (DSC)-Since all the documents & attachments have to be filed online, it will be mandatory for the directors of the Public Limited Company to obtain a DSC. A DSC helps to verify the authenticity of filling documents filed & submitted during incorporation and thereafter.

viii. Certificate of Compliance– After all the documents are drafted & prepared, the prospective Public Limited Company will need to obtain a certificate of compliance from a professional such as a CA/CS/CMA, that all the declarations for incorporation of a Public Limited Company have been genuinely made.

Benefits of Public Limited Company Registration in Bhopal, Madhya Pradesh

i. Limited Liability- Unlike a partnership firm, a Public Limited Company is a legal person whose assets& liabilities are separate from its members and thus the members of the company have limited liability towards the debts of the company, which cannot go beyond their agreed contribution to the capital of the company made by them in correspondence to the nominal value of their shares.

ii. Transparent & trustworthy– Since there is a larger public interest involved in a Public Limited Company in the form of investment, hence it is subject to higher compliances such as fillings of financial statements & annual returns, the Government demands more transparency from such companies in the form of compliances and intimations about changes from time to time.

iii. Easier Transfer of Shares- As per the provisions of the Companies Act 2013, the members in a Public Limited Company have no maximum limit, thus the shares of a Public Limited Company could be easily transferred from one person to the other. Especially for listed public companies, the prices of shares are quoted on a stock exchange, thus it is easier for anyone to sell or buy shares in the company

iv. Perpetual Succession– Unlike a partnership firm, a Public Limited Company enjoys perpetual succession, which means irrespective of the events like death, insolvency or any disability of its partners shall not affect its legal status. It continues to live until & unless it is legally dissolved through the prescribed procedures.

v. Ease to raise funds- A Public Limited Company having more members than any other business entity has access to more capital which also helps them in obtaining loans from banking & financial institutions and even from investors who join as a shareholder. Due to this, they can even enter negotiations to demand favorable rates of interest and conditions for repayment of loans. Additionally, a Public Limited Company can also offer debt securities for the purpose of extra funds for business expansion purposes.

vi. Better Growth and Expansion Opportunities-Compared to any other business entity, a Public Limited Company has several sources of gaining capital such as the fresh issue of shares, issue of debt securities, and loans from banks & financial institutions, there is always a strong probability of strong market presence and growth opportunities. Thus, it is significantly easier for a Public Limited Company to expand its business operations and get growth opportunities as compared to entities like private companies or LLPs who have to work relatively harder to raise funding or get investments.

Disadvantages of a Public Limited Company registered in Bhopal, Madhya Pradesh

1. Higher cost of Compliances– As aforementioned, in the case of a Public Limited Company, there is more public interest attached to the business management decisions and their consequences. Accordingly, it has to fulfill more compliances than other business entities, and hence there are higher costs of compliances.
2. Problems with Decision Making- Unlike a private company, where the number of members is limited, the number of shareholders is significantly larger, and no key decision related to the business could be made without the approval of shareholders. Thus, for making any business decision, the board of directors has to lay it in front of the shareholders and pass a resolution for carrying matters forward, which takes a longer time & effort.

Documents Required For Public Limited Company registration in Bhopal, Madhya Pradesh

i. Proof of Identification of all the proposed members and directors;

ii. Proof of residence of all the proposed directors and shareholders.

iii. Address Proof for the proposed registered address of the company such as utility bills.

iv. PAN Card of the proposed members;

v. In case the office property is rented, a NOC from the owner of the property

vi. Copy of proposed memorandum & articles of association of the company;

vii. DSC (Digital Signature Certificate) & DIN (Director Identification Number) of all the proposed directors.

Conclusion of Public Limited Company registration in Bhopal, Madhya Pradesh

Therefore, a Public Limited Company registered in Bhopal, Madhya Pradesh is a business entity that allows benefits of better funding & growth opportunities for entrepreneurs, which could be incorporated by following a simple and convenient process. So, get your company incorporated and start your journey today.