Public Limited Company Registration in Guwahati, Assam – Features, Difference, Process, Eligibility Criteria, Benefits, Disadvantages, Documents Required

Overview of Public Limited Company registration in Guwahati, Assam

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 Guwahati, Assam.

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 Assam

Assam is a northeastern state of India situated in the south of the eastern Himalayas and the Barak and Brahmaputra Rivers. The state’s official language is Assamese and Bodo, and Assam is particularly famous for tea and Assam Silk. The state is the home to one-horned Indian Rhinoceros, Asian elephants, tigers, and various wildlife animals and Asiatic birds. The Kaziranga National Park and Manas National Park are also located in Assam, and both the national parks boost the state’s economy through wildlife tourism.

Capital- Dispur
Assam is the highest tea producer in India and produces more than half of the country’s tea. The state’s economy primarily depends on agriculture and oil. The Assam Arakshan Basin has a quarter of the country’s total oil reserves and produces 12% of the country’s petroleum. Besides all this, Assam is also rich in natural resources.
Despite its petroleum reserves, high tea supply, and rich natural resources, Assam’s growth rate cannot keep pace with the country’s growth rate. From 1981 to 2000, the growth rate of the Indian economy was 6% per annum, but the growth rate of Assam was noted to be 3.3%. Even during the sixth plan period Assam reported a negative growth of 3.78%. The economy of Assam is showing signs of improvement, especially in the manufacturing sector. Over the past five decades, the tertiary sector of Assam has constantly been improving and recorded the highest growth rates.
The employment rate of the Assam is relatively low, making unemployment a significant issue of concern for the Assam government. The reason associated with unemployment can be poor education system and overpopulation. Though the state has oil reserves and rich natural resources still, the unemployment rate of Assam is relatively high. Two factors are working behind that. First, the oil reserves hire highly qualified workers outside of Assam; besides this, the local people of Assam have employment threats from the illegal migrants of Bangladesh who compete with the local population by offering to work at lower wages.
Agriculture is the only sector that records growth and is the highest contributor to the economy of Assam. The state is famous around the globe for its tea. Though the state records growth in agriculture, the methods used for agriculture in Assam are primitive, and the modernization in Assam agriculture is yet to be realized. Floods are another major threat to Assam agriculture as the state is located in a flood-prone area. Every year the families of Assam farmers have to suffer due to the overflowing of rivers resulting in floods. Besides agriculture, hand-looming and handicraft of Assam are famous in the country.

Business ideas in Assam
The Government of Assam is taking initiatives and making schemes to encourage the people to startups. The state government is very determined to make the policies to develop a good startup ecosystem. Currently, doing business in Assam is relatively easy compared to other states in the country. Many sectors in Assam have shown signs of improvement; some of them are – petrochemicals, tea production, handloom industry, personal care products, food processing, and many more. Following are the best business ideas in Assam: –

Tea production
Tea is the beloved drink of India, and Assam being the highest tea producer, increases the chances of a successful tea business. The state already produces 51% of the total tea in the country, so setting up a tea plantation or selling packaged tea, flavored tea, etc., can be a good startup idea in Assam.

Handloom
It is the oldest industry in Assam, due to which the state has a rich art of handloom, and people around the country love the Assamese handlooms. Even the foreign nationals who visit India want to possess Assamese handloom. Hence, the demand for Assamese handloom is relatively high, which indicates that it will be a profit-yielding business in Assam.

Fish farming
The state government of Assam is trying to promote fish farming for economic purposes. For that, the state government has created a fisheries department to promote the idea of commercial fish production in almost all water bodies. The fish industry in the state is growing at a fast pace, which means that fish farming in Assam is undoubtedly a good idea for making profits.

Agarwood
Assam is naturally perfect for growing raw material required for agarbatti or joss stick. The agarwood made in Assam is demanded and supplied all around the globe, and one can open a store and sell agarwood products in Assam.

Tourism
Assam has nature’s beauty, and that’s why tourism is among the flourishing sectors in Assam. Undoubtedly there are many unexplored tourist spots in Assam which means that the tourism business is ever-expanding. Tourism-related businesses like transport services, tourist guide facilities, restaurants, hotels, etc., will surely be very profitable in the state.

Coaching institutes
The quality of education is very poor in Assam; that’s why the state’s unemployment rate is so high. Assamese want to develop their state by taking part in administration, but because of poor quality education, they didn’t get successful in it. So, setting up coaching institutes that provide good quality education for different competitive exams will be a great business idea.

Healthcare
Assam is close to nature and perfect for the startup of Ayurvedic healthcare products. Over the past few years, Assam has developed successful entrepreneurs like Dr. Rakesh Das and Ghanshyam Das Dhanuka in healthcare and pharmaceuticals. One can open the startup of ayurvedic and organic healthcare products in Assam. Though this is an unconventional business idea, it will make huge profits.

Startup Ecosystem in Assam
Though the startup ecosystem has not fully developed in Assam, the state government is working on building a prosperous startup ecosystem in Assam. In ”Startup India Awards 2020,” Assam has been recognized as an emerging startup ecosystem in the country. The Government is formulating different schemes and policies to build a supportive startup ecosystem in Assam and motivate youth to take up entrepreneurship as their career.

Salient Features of a Public Limited Company registered in Guwahati, Assam

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 Guwahati, Assam

There are several differences between a private & Public Limited Company registered in Guwahati, Assam 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 Guwahati, Assam

Step 1-Obtain DSC for the proposed Company in Guwahati, Assam

As a first step towards registration in Guwahati, Assam, 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 Guwahati, Assam

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 Guwahati, Assam

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 Guwahati, Assam

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 Guwahati, Assam

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 Guwahati, Assam

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 Guwahati, Assam

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 Guwahati, Assam

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 Guwahati, Assam

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 Guwahati, Assam

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 Guwahati, Assam

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 Guwahati, Assam

Therefore, a Public Limited Company registered in Guwahati, Assam 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.