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

Overview of Public Limited Company registration in Visakhapatnam, Andhra 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 Visakhapatnam, Andhra 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 Andhra Pradesh

Andhra Pradesh is located in the southeastern coastal region of India, and it is the tenth most populous state and seventh-largest state by area in India. It is bordered by Chhattisgarh, Karnataka, Odisha, Tamil Nadu, Telangana & The Bay of Bengal. The state was formed on 01 October 1953, and it is the first state whose formation was based on language. In June 2014, Andhra Pradesh went through reorganization for administrative purposes, and Telangana was carved out from Andhra Pradesh.

Capital– Amaravati

The economy of Andhra Pradesh

The economy of Andhra Pradesh is mainly based on the primary sector. The economy of Andhra Pradesh is primarily based on agriculture and livestock. Andhra Pradesh mainly consists of three agricultural economic zones – the first is the Chittoor district for mango pulp and vegetables, the second is the Krishna district for mangoes, and lastly, the Guntur district is for chillies.

Rice is the primary crop of the state. Andhra Pradesh is known as the ”Rice bowl of India’ as it is a significant exporter of Rice. Besides agriculture, livestock and poultry are the other two profit-yielding businesses in Andhra Pradesh. It is also called the ”Egg bowl of Asia’ as it is the largest producer of eggs in the country.

Infrastructure and Industries in Andhra Pradesh

Talking about the state’s infrastructure it is highly focused on developing a world-class infrastructure. The State Government is widening the state’s highways; besides, National Highway 16 also passes through the state. Currently, under the Andhra Pradesh State Fiber Net Limited (APSFL) initiative, the Government is trying to set up an optical fiber network to connect the thirteen districts of the state.

The primary industrial sector in Andhra Pradesh is Pharmaceutical, textiles, and automobiles. By improving its infrastructure and connectivity, Andhra Pradesh is also emerging in biotechnology and information technology.

Resources in Andhra Pradesh

Andhra Pradesh has varied geological formations that contain a rich variety of industrial minerals and building stones. The rich and diverse industrial minerals and building stones make Andhra Pradesh one of India’s storehouses of mineral resources.

How can mining affect the fate of Andhra Pradesh?

Mining is expected to be the overall infrastructure and industrial development growth engine. The Tummalapalle Uranium Mine in Andhra is reported to have 49,000 tonnes of ore, and the state is estimated to hold reserves totalling three times its current size. Andhra Pradesh has metal-grade bauxite deposits, gas reserves, etc., that are expected to provide rapid economic growth. So currently, mining is expected to affect the fate of Andhra Pradesh.

Top business ideas in Andhra Pradesh

The Government of Andhra Pradesh has implemented various reforms in the business sector and has been ranked the No. 01 state on ease of doing business for consecutively two years (2016-17). Here are some business startup ideas that one can try in Andhra Pradesh.

Horticulture 

Andhra Pradesh is the top producer of papaya tomato, chilies, oil palm, lime, cocoa, and the second leading producer of turmeric sweet orange, mango, and cashew in India. The recent increase in demand for organic food makes Andhra Pradesh suitable for horticulture. You will get ample resources for starting a horticulture business in Andhra Pradesh.

Eco-Tourism

Andhra Pradesh has a wide forest cover that makes it perfect for eco-tourism. The state is close to nature and offers exotic natural views that attract many people. Beautiful views and greenery make Andhra Pradesh suitable for eco-tourism.

Sericulture

Being the second-largest producer of silk Andhra Pradesh is perfect for sericulture. The sericulture business has a wide scope in Andhra Pradesh. If you plan to start a sericulture business, you can develop it as a local business idea.

Fisheries

Andhra Pradesh is the top fish and shrimp producer in India, and the Fisheries employ more than 14.5 lakhs people. The Government provides power tariff concessions to around 53,500 aquaculture farmers. That’s why Andhra Pradesh stands first in the Aquaculture area and production. Besides this, the state government provides many subsidized resources for the maintenance and care of fish. Fisheries business in Andhra Pradesh is undoubtedly one of the beneficiary business ideas. If you plan to start a fisheries business in Andhra Pradesh, you will also receive a power supply at a subsidized power rate from the state government. Above all, you will be able to take advantage of all the schemes and policies of the Andhra Pradesh Government made for the promotion of fisheries and aquaculture.

Neem Oil Extraction

Another significant business idea in Andhra Pradesh is Neem oil extraction. Andhra Pradesh is naturally suitable for the fast growth of Neem trees. That’s why the neem oil extraction business or other businesses related to neem has a vast scope in Andhra Pradesh. Neem is of major importance in the skincare and beauty industry, so neem oil extraction and other businesses related to neem will surely yield huge profits.

Poultry Farming

Andhra Pradesh is mainly based on Primary sector activities, and it is among the states that promote the animal husbandry sector. The poultry farming business in Andhra Pradesh immensely depends on milk, meat, and egg, and Andhra Pradesh has a broad scope in poultry farming and other related businesses.

Textile business

Andhra Pradesh is the second-largest cotton and silk fabric producer in India. Textile business in Andhra Pradesh is very prospering and has a wide scope. The skilled artisans and experts required to produce cotton and silk garment and fabric are locally available in Andhra Pradesh. With the help of local artisans and readily available raw material, one can easily set up a small-scale textile business in Andhra Pradesh.

Forest resource supplier

Andhra Pradesh has a wide forest cover, making it a rich source of forest-related resources. The craze for forest resources is increasing day by day in the country. The forest resources, including beedi leaves, nuts, bamboo, neelavema, tamarind, rosewood, etc., are immensely demanded. So, the forest resource supplier business will not take you to loss.

Startup Ecosystem in Andhra Pradesh

Anudeep Chappa, the associate director of Tie Amravati, has stated that the talent pool has been moving out of Andhra Pradesh to other places like Bengaluru or Hyderabad. The movement is taking place immediately after graduation. Anudeep Chappa observed a similar trend in startups also and predicted that it could immensely affect the startup ecosystem of Andhra Pradesh. Earlier, Andhra Pradesh used to house the IT hub of the country, but after the formation of Telangana, the state had to suffer significant setbacks.

How is Andhra Pradesh Government boosting the startup growth of the state?

Andhra Pradesh has made slow but steady development in building a startup ecosystem. The Government has taken a lot of initiatives and built schemes to attract the talent pool and startups. The state government is taking active measures to promote the rise of the tech economy.

The Government of Andhra Pradesh has set up incubators and accelerators to support startup growth. Besides this, the Government is trying to help startups grow by aiding the innovation fund of INR 100 crores. Along with this, the state government of Andhra Pradesh provides performance-linked assistance of over 12 thousand Indian rupees per month for startups and more.

What is ”Make in AP?”

Make in AP is a state-government established platform for startups. With the help of the Make in AP (Andhra Pradesh) initiative, young professionals and entrepreneurs can interact with mentors and corporates to develop their businesses. Through the Make in AP initiative, the Government provides adequate support to startups by providing cash prizes, incubation, mentoring, etc.

Salient Features of a Public Limited Company registered in Visakhapatnam, Andhra 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 Visakhapatnam, Andhra Pradesh

There are several differences between a private & Public Limited Company registered in Visakhapatnam, Andhra 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 Visakhapatnam, Andhra Pradesh

Step 1-Obtain DSC for the proposed Company in Visakhapatnam, Andhra Pradesh

As a first step towards registration in Visakhapatnam, Andhra 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 Visakhapatnam, Andhra 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 Visakhapatnam, Andhra 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 Visakhapatnam, Andhra 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 Visakhapatnam, Andhra 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 Visakhapatnam, Andhra 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 Visakhapatnam, Andhra 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 Visakhapatnam, Andhra 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 Visakhapatnam, Andhra 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 Visakhapatnam, Andhra 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 Visakhapatnam, Andhra 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 Visakhapatnam, Andhra Pradesh

Therefore, a Public Limited Company registered in Visakhapatnam, Andhra 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.