Question 1

What is the difference between a Public Limited Company and a Private Limited Company?

Accepted Answer

A Public Limited Company can offer shares to the general public, has no upper limit on shareholders, and can be listed on a stock exchange. A Private Limited Company cannot offer shares to the public, is limited to 200 shareholders, and restricts share transfers. Public companies also have higher compliance requirements.

Question 2

Is a Public Limited Company required to list on a stock exchange?

Accepted Answer

No. Incorporation and listing are separate. A company can be registered as a Public Limited Company without listing on BSE or NSE. However, if you plan to list later, you must already be a Public Limited Company.

Question 3

What government fees apply for registering a Public Limited Company?

Accepted Answer

MCA fees depend on the authorized share capital and the state of registration. Stamp duty varies by state. There is no fixed fee, and charges are calculated at the time of filing.

Question 4

Can I convert my Private Limited Company into a Public Limited Company later?

Accepted Answer

Yes. Conversion is allowed under the Companies Act, 2013. It requires a special resolution, amendment of MOA and AOA, and filing required forms with MCA.

Question 5

What is the SPICe+ form and how does it apply to Public Limited Company incorporate?

Accepted Answer

SPICe+ is an integrated MCA form used for name reservation, DIN allotment, incorporation, and PAN/TAN registration in a single application. It applies to Public Limited Companies as well.

Question 6

What is an independent director and why is one required?

Accepted Answer

An independent director is a board member with no financial, managerial, or family relationship with the company or its promoters. At least one-third of the board in a Public Limited Company must be independent directors to ensure unbiased governance.

Question 7

Can a Public Limited Company have foreign shareholders?

Accepted Answer

Yes. Foreign individuals and companies can hold shares under FDI regulations governed by FEMA. Most sectors allow automatic approval, while some require government approval.

Question 8

What is the minimum number of shareholders and directors needed?

Accepted Answer

A Public Limited Company requires at least 7 shareholders and 3 directors. At least one director must be an Indian resident, and one-third of the board must be independent directors.

Question 9

What is the difference between Individual Foreign Shareholding (Path 3) and Foreign Corporate Shareholding (Path 4)?

Accepted Answer

Path 3 applies when a foreign individual holds shares, requiring personal documents like passport and address proof. Path 4 applies when a foreign company invests, requiring corporate documents and resolutions. Both require RBI reporting and valuation certification.

Question 10

What is the role of FC-GPR filing for foreign shareholders?

Accepted Answer

FC-GPR is an RBI reporting requirement filed within 30 days of share allotment to foreign investors. It includes investment details and requires a valuation certificate.

Question 11

Can NRIs be shareholders or directors in a Public Limited Company?

Accepted Answer

Yes. NRIs can be shareholders and directors. However, at least one director must be a resident in India (120+ days stay in the previous financial year).

Question 12

What are the annual compliance requirements for a Public Limited Company?

Accepted Answer

A Public Limited Company must file INC-20A, hold an AGM annually, conduct at least 4 board meetings per year, file annual returns (MGT-7), file financial statements (AOC-4), maintain statutory registers, get accounts audited, and comply with SEBI regulations if listed.

Setup Your Public Limited Company in India — Online, Expert-Handled, Fully Guided