Public Limited Company Registration in Kolkata, West Bengal – Features, Difference, Process, Eligibility Criteria, Benefits, Disadvantages, Documents Required

Overview of Public Limited Company registration in Kolkata, West Bengal

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 Kolkata, West Bengal.

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 West Bengal

West Bengal is prominently known as the city of joy for its elated personification of culture, enthralling love, hidden mystery, and mouthwatering sweet delicacies. It is located along the Bay of Bengal in the eastern part of the country. This state shares the international boundary with Nepal and Bhutan in the north, Bangladesh in the east, and national boundaries with Odisha in the South-west, Jharkhand in the West, and Bihar in the North-West, Sikkim in the North, and Assam in the North-East. West Bengal is 4th in terms of population and 13th in terms of area in India. The state’s capital is Kolkata, the 3rd largest metropolitical city and the 7th largest in terms of population in India. As per the demographics, Bengalis are the main ethnic group comprising most of the population. There are many languages spoken in this region, but among them, majorly spoken languages are Bengali and English.
West Bengal possesses two world heritage sites and is the country’s 7th most visited tourist destination. This state owns a peerless and diverse geographical division with numerous natural assets, stretching from the Darjeeling mountains of the Himalayans north to the Gangetic plain south. The state shares the ultimate rhythm from exquisite and quiet beaches of the coastal plain to the world’s largest Delta(Sunderbans), which is also known for providing a natural abode for the scarce wild species of Royal Bengal Tigers. This state is known for its traits in unfolded and untold mysteries, rich cultural heritage architecture with the blend of fine arts and embroidery, brilliant folk festivals, traditional customs and rituals, delicious cuisines, and many pleased specialties about this magical land. This state has the ultimate vision to form the home of legendary freedom fighters, sinners, saints, poets, and many others concentrated as the cultural and intellectual hub since pre-colonial times.
The economy of West Bengal is based on agricultural production and small and medium-sized business models. The proportion of Agricultural land in Bihar state is the highest among all Indian states, and this state significantly contributes to India’s Rice harvest. After the economic stagnation for years, in 2020-21, the economy of West Bengal is the 6th largest in the country in terms of gross state domestic product (GSDP). It has India’s 20th highest GSDP per capita. West Bengal state has the 28th highest ranking among the Indian States on Human Development Index. Other service sectors such as trade, finance, insurance, and other related activities have also shown significant growth in the past few years.
Capital- Kolkata

Top Business Idea in West Bengal
As per the study and statistics performed in 2015-16, West Bengal is the 6th largest state (around 140.56 billion USD) that majorly contributes to the Indian economy’s GDP. This state has immense potential in the field of startup vision. Also, the state facilitates robust connectivity to the rest of India by making it one of the most demanding and lucrative platforms for initiating a profitable and productive business. Given below are the list of a top business idea that can bring a change to the realm of the business ecosystem:-

Quick Service Restaurant Business
People of this region of India are real food lovers as the recent study and research show that there is considerable growth in the number of fast-food lovers among the people living in the urban towns and cities of West Bengal. As per the region’s requirement, you should set up or buy a franchise of famous and reputed fast-food brands such as Chickblast, Kathi Junction, KFC, Dominos, etc., in the venture of the pertaining industry.

Florist shop Business
The flower-selling business has seen credible growth in the past few years, especially in West Bengal. However, there are mainly two reasons. The first reason is an increase in the purchasing power of the young generation and the second reason is citizens of this state are religiously hyped. Merely all the festivals in west Bengal are celebrated with pomp and joy, but the inclusion of flowers can fulfill the main essence of the celebrations. Companies like Ferns and Petals, Floralis, etc., offer franchise opportunities in West Bengal. Thereby building a profitable and cost-effective business idea with an optimistic future.

Diagnostic Center Business
A person who has an experience in the field of laboratory science can establish or set up a diagnostic center business idea with a considerable capital amount. These Diagnostic Center business with pathology is one of the most productive and lucrative businesses in the field of medicine and the pharms industry. The awareness of the physician and the increase in the patient’s requirements to take high-quality care services in West Bengal have increased the demand for the best quality diagnostic center. Many companies like Apollo, Thyrocare, etc., are offering franchise opportunities for the investors as per the ease of doing business.

The startup ecosystem in West Bengal
Startups have entered every expected corner of the country. Hence, by breaking many cultural biases and helping the economy to grow. The government of West Bengal has come up with an initiative to facilitate the startup to access the various required resources of the Startup Eco-System in the state. The Startup Bengal initiative majorly assists in stimulating an entrepreneurial environment in the state. The main objective of this initiative is to create an enabling environment to inspire the youth of this state and encourage them to engage with all stakeholders and investors of the Startup to strengthen the start-ups.
A comprehensive startup initiative will support the startups at all stages. These entrepreneurship programs must be added to the curriculum or syllabus of the educational institutions to foster youth to come up with new innovative business ideas. In the past few years, this state has set an example in building an environment that consistently registers new organizations throughout the state. Creating a vibrant and proper framework, including coaching by using the existing business associations like the Indian Institute of Management (IIM) Calcutta, Indian Institute of Technology (IIT) Kharagpur, Council of Scientific and Industrial Research (CSIR) labs in West Bengal, etc., thus the entrepreneurs and investors are the crucial assets as they are an essential tool for economic development and creating job opportunities throughout the state.

Salient Features of a Public Limited Company registered in Kolkata, West Bengal

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 Kolkata, West Bengal

There are several differences between a private & Public Limited Company registered in Kolkata, West Bengal 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 Kolkata, West Bengal

Step 1-Obtain DSC for the proposed Company in Kolkata, West Bengal

As a first step towards registration in Kolkata, West Bengal, 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 Kolkata, West Bengal

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 Kolkata, West Bengal

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 Kolkata, West Bengal

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 Kolkata, West Bengal

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 Kolkata, West Bengal

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 Kolkata, West Bengal

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 Kolkata, West Bengal

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 Kolkata, West Bengal

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 Kolkata, West Bengal

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 Kolkata, West Bengal

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 Kolkata, West Bengal

Therefore, a Public Limited Company registered in Kolkata, West Bengal 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.