Overview of Public Limited Company registration in Delhi NCR

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 Delhi NCR.

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 Delhi NCR

Delhi, officially known as the National Capital Territory (NCT) of Delhi, is India’s union territory and capital. Delhi shares boundaries with Uttar Pradesh and Haryana. The city was the capital of two major empires, the Delhi sultanate and the Mughal Empire, from the 13th to the mid-19th century. New Delhi, the southern region within Delhi, was declared the capital of the British Indian Empire. In the index of human development, Delhi ranks 5th. Besides this, Delhi has the second-highest GDP after Goa.
As per the 2011 census of India, the total population of NCT of Delhi is 16,753,235, with a population density of 11297 persons per square kilometer. The sex ratio of Delhi is 866 women per thousand men, and the literacy rate of Delhi is 86.34%.
The major service industries in Delhi are information technology, hotels, telecommunications, media, banking, and tourism. Besides these services, health, power, construction, real estate, and community services have also helped boost Delhi’s economy. The city currently has India’s most prominent and fastest-growing retail industry and is also the largest commercial center in Northern India. Some good companies have established manufacturing units in this city’s headquarters, which helped grow the manufacturing sector.
Hinduism is the predominant religion in Delhi, followed by Islam, Sikhism, Jainism, and Buddhism. Hindi is the most spoken language in Delhi, and other languages spoken in Delhi are Punjabi, Urdu, and Bengali. The city’s official language is Hindi, and Urdu and Punjabi are declared additional official languages.

The startup ecosystem in Delhi
As per the economic survey 2021-22, Delhi, the national capital of India, has replaced Bangalore as the startup capital of India. The Government of Delhi has the vision to transform the national capital into a global innovation hub. The government aspires to make Delhi the most preferred destination for startups by 2030.
With the help of the startup policy, the government will try to build a strong enabling ecosystem for an innovation-based economy. Through the policy, the government wants to foster entrepreneurs’ spirit with the help of a strong support mechanism. The government aims to encourage, facilitate and support 15,000 startups by 2030 with the help of the Delhi startup policy. The vision of the Delhi startup policy is to create entrepreneurs and business leaders out of Delhi youth. So, the startup policy of Delhi aims to attract the young population to become entrepreneurs and business owners. This will be done by teaching entrepreneurship to students from 9th to 12 standards. To aid them, the government will provide seed capital under the ‘Business Blaster Program.’ The Business Blaster Program is an initiative the Delhi government took to encourage the spirit of entrepreneurship in the school-going students of Delhi.
The Delhi government is trying to build a strong and supportive startup ecosystem in Delhi. Delhi already has a very strong startup ecosystem, but there is always room for improvement. The Delhi government’s vision is to attract young people to entrepreneurship and build a world-class startup ecosystem.

Effective startup ideas in Delhi
Delhi has replaced Bengaluru as the startup capital of India, which means that it is undoubtedly the best place to start a business. The city has several business opportunities, and wholesale products are readily available. With the help of readily available resources, it becomes easy to set up business in Delhi. So, if you are wondering about startup ideas in Delhi, then here are some of the best startup ideas in Delhi.

Hand crafted items
The crowd of Delhi is all about thrift stores and handcrafted items. In the 21st century, that trend of handmade or handicraft items is returning to India’s capital. The demand for handmade and ethnic items like decorative items, embroidered clothes, handbags, etc., is relatively high in Delhi markets. So, opening a business of handcrafted items is undoubtedly going to make you huge profits with less investment. Above all, you can design your website or collaborate with online stores to sell your handmade items. You can promote your handcrafted items through Instagram, Facebook, and other social media platforms.

Printed Clothes
Delhi is famous for its fashion sense and statement clothing. The young population in Delhi is more attracted to printed clothes, especially the ethnic ones. Opening a printed cloth business is undoubtedly a good idea in Delhi because clothes are more than just an attire in Delhi. For Delhiites, clothes are vibes, so the printed clothes business is small yet a profitable business idea. You can build your own website to sell the clothes you have printed, or you can sell the clothes to wholesale markets.

Online Dietician service
Delhi is all about food and fitness. So, starting an online dietician business is an excellent idea if you have a background in food and nutrition. People in Delhi are getting health-conscious nowadays. You will find people eagerly waiting to adopt a healthy lifestyle, so if you can help them regulate their diet, setting up an online dietician service is a good startup idea. With the help of the dietitian business, you will not only earn money but also make a difference in the life of people who are fitness and health-conscious but do not know how to maintain their health. This is a low investment yet profitable business idea in Delhi.

Hostel services
Being the hub of educational coaching institutes, Delhi attracts many students from other states. Many students across the country come to Delhi to get a quality education. Such students need accommodation facilities, so opening a hostel service is undoubtedly an excellent startup idea. To open a hostel, you need considerable capital to invest in the business. Though this idea needs considerable investment, it will surely yield you long-term high profits.

 

Salient Features of a Public Limited Company registered in Delhi NCR

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 Delhi NCR

Difference between Private & Public Limited Company registered in Delhi NCRThere are several differences between a private & Public Limited Company registered in Delhi NCR 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-

 

Points of Difference Public Limited Company Private Company
Meaning A Public Limited Company is publicly owned & traded on the stock exchange A private company is privately owned & traded.
Use of Suffix Limited is added after the name of the Public Limited Company i.e. XYZ Ltd. Private Limited can be used after the name of the private company LKJ Pvt. Ltd
Directors Three directors are required for the public limited company registration process Two directors have required for setting up a private limited company.
Independent Director For a public limited company, independent directors must be recruited by the Board. Since there is no public interest involved, no requirement for an Independent director
Members or Shareholders A minimum of seven members is required for public limited company registration Three Members are required for a private limited company
Start of Business A certificate of commencement of business is required along with a certificate of incorporation. Only a certificate of incorporation is required to start the business.
IPO A Public Limited Company is allowed to raise capital from the public by inviting them to contribute to the capital of the company in IPO.

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A private company cannot go for an initial public offering unless it gets converted into a Public Limited Company.
Disclosure of Financial Statements Every Public Limited Company is required to disclose its financial statements quarterly as well as financially. Not required

 

Process of Public Limited Company Registration Online in Delhi NCR

Step 1-Obtain DSC for the proposed Company in Delhi NCR

As a first step towards registration in Delhi NCR, 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 Delhi NCR

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 Delhi NCR

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 Delhi NCR

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 Delhi NCR

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 Delhi NCR

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 Delhi NCR

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 Delhi NCR

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 Delhi NCR

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 Delhi NCR

  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 Delhi NCR

Documents Required For Public Limited Company registration in Delhi NCR

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 Delhi NCR

Therefore, a Public Limited Company registered in Delhi NCR 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.