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

Overview of Public Limited Company registration in Mumbai, Maharashtra

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 Mumbai, Maharashtra.

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 Maharashtra

Maharashtra is a state located in the western peninsula region of India and occupies a substantial portion of the Deccan Plateau. It is India’s second-most populous state, formed on 1st May 1916 by splitting the bilingual Bombay state into Maharashtra and Gujarat. In total, Maharashtra is divided into six divisions and 36 districts, and Mumbai is the capital of Maharashtra. In terms of area, Maharashtra is the third-largest city, bordered by the Arabian Sea, Karnataka, Goa, Telangana, Chhattisgarh, Gujarat, and Madhya Pradesh, and the union territory of Dadar and Nagar Haveli & Daman and Diu.
Maharashtra consists of three international airports: Chhatrapati Shivaji Maharaj International Airport in Mumbai, Dr. Babasaheb Ambedkar International Airport in Nagpur, and Pune airport. Besides this, the state also has four UNESCO World Heritage Sites – Ajanta, Ellora, Elephanta Caves, and the Chhatrapati Shivaji Maharaj Terminus.
Mumbai is the commercial and financial capital of the state. Maharashtra is among the most industrialized states in India and plays a significant role in developing the country’s social and political life. The oldest city in Asia is also located in Mumbai. Maharashtra is the largest contributor to the national economy and is counted among India’s most developed states. Maharashtra holds the largest economy in India, and the service sector is the dominating sector of Maharashtra’s economy.
Capital- Mumbai

The startup ecosystem of Maharashtra
In 2018 the State Government of Maharashtra launched its startup policy called the ‘Maharashtra State Innovative Startup Policy’ to boost the entrepreneurship spirit in Maharashtra. The startup policy of Maharashtra aims to target economic growth and generate employment by encouraging entrepreneurs to design more job opportunities. The startup policy of Maharashtra focuses on biotechnology, artificial intelligence, clean energy, etc. The State Government of Maharashtra aims to build robust incubation and a seed funding mechanism to create a supportive startup ecosystem in the state. The objectives of the startup policy of Maharashtra are as follows: –
Through the startup policy, the state government wants to provide a platform to nurture the entrepreneurial aspiration among the citizen, especially the youth of Maharashtra.
The policy aims to empower startups to contribute significantly to the state’s economy and create employment opportunities for different sections of society.
By designing the startup policy, the government of Maharashtra visions to develop a strong infrastructure with the purpose of easing the regulatory framework to spur the development of the startup ecosystem.

Business ideas in Maharashtra
Maharashtra is counted among the hub of many best industries, and the state is known for its mouthwatering cuisine, beautiful beaches, hills, and rich culture. The financial capital of India, Mumbai, is also located in Maharashtra. Mumbai is a top contributor not only to the state economy but also to the Indian economy. Mumbai is called the ‘City of Dreams’ because many people come to Mumbai with the dream of getting several job opportunities. The state offers employment and job opportunities to a huge section of society. The startup ecosystem of Maharashtra is robust and supportive of the growth of small businesses. If you are thinking of starting a small business in Maharashtra, then below are some best Startup ideas in Maharashtra: –

Dance studio
People come to Mumbai, ‘the city of dreams,’ to get casted in movies. The entertainment industry of Mumbai is one of the top contributors to the state’s economy. The entertainment industry of Maharashtra, particularly Mumbai, consists of actors, dancers, musicians, directors, makeup artists, fashion designers, camera operators, and many more. Those who aspire to become an actor wants to learn dance. Opening a dance academy will be the best business option in Maharashtra if you have a dance background.
Mumbai is the hub of one of the top entertainment Industries called the ‘Bollywood Industry.’ A lot of people around the globe come to Mumbai with a motive to try their luck in the entertainment industry. You need a significant amount of money to open a dance academy in Maharashtra and hire professional and skilled dancers of different dance forms to teach students. Initially, this business will require a lot of effort and energy, but once it is established, it will help you make huge profits.

Textile business
Maharashtra is counted among the largest textile manufacturing states in the country, and cities like Solapur, Bhiwandi, and Malegaon are famous for textile mills. The state offers enormous opportunities to start a textile business. Maharashtra has excellent retail and wholesale textile markets and manufacturers, so it is easy as well as profitable to open a textile business in Maharashtra. For setting up a textile business, you will not require a lot of investment as it is a low-investment business.

Organic stores
The state is counted among the largest agricultural states in India. With growing consciousness towards health, the demand for organic fruits and vegetables is rising day by day. People are trying to change their eating habits and lifestyle and switch to a healthy and environment-friendly lifestyle. They are continuously searching for organic fruits and products and never mind spending some extra penny for organic products. So, setting up organic fruits and products business is a very good idea.
With an increase in the demand for organic fruits, vegetables, and products around the country, the scope of organic farming and related business is also expanding. If you belong from an agricultural background and have some knowledge of organic farming, then you should try your hands at the organic fruits, vegetables, and products business.

Fast food stalls
The Maharashtrian Street food is famous among domestic as well as foreign tourists. The most prominent street food of Maharashtra is vada pav. Besides vada pav, Maharashtra’s other famous street foods are misal pav poha and pav Bhaji. The fast-food business in Maharashtra will help you in yielding huge profits. Maharashtra, particularly Mumbai is full of crowds, so to start a fast-food business, you need to arrange adequate space near railway stations, markets, colleges, schools, etc., to attract the people to your food stall. You can also connect your fast-food business with online delivery companies like Swiggy and Zomato to expand your business. The fast-food stall is a low-investment business and can help you profit considerably.

Salient Features of a Public Limited Company registered in Mumbai, Maharashtra

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 Mumbai, Maharashtra

There are several differences between a private & Public Limited Company registered in Mumbai, Maharashtra 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 Mumbai, Maharashtra

Step 1-Obtain DSC for the proposed Company in Mumbai, Maharashtra

As a first step towards registration in Mumbai, Maharashtra, 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 Mumbai, Maharashtra

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 Mumbai, Maharashtra

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 Mumbai, Maharashtra

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 Mumbai, Maharashtra

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 Mumbai, Maharashtra

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 Mumbai, Maharashtra

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 Mumbai, Maharashtra

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 Mumbai, Maharashtra

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 Mumbai, Maharashtra

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 Mumbai, Maharashtra

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 Mumbai, Maharashtra

Therefore, a Public Limited Company registered in Mumbai, Maharashtra 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.