Public Company is the company which can be incorporated with zero paid up capital as per the Companies Act (Amendment), 2015.This is the company which can start its business with minimum 7 members. It has to get registered with the Registrar of companies and required to obtain the Certificate of Incorporation and Certificate of Commencement to start its business. It raise its capital by issuing the shares to the public.
ACCORDING TO SECTION 2(71) OF COMPANIES ACT, 2013
“A public company is a company
- which is not a private company
- is a private company but a subsidiary of a public company.”
FEATURES OF PUBLIC COMPANY
NUMBER OF MEMBERS
The public company must have minimum 7 members to start its business. The maximum number of members can be unlimited.
It has its capital divisible in number of shares. The company raise its capital by issuing the shares to the public. The shares issued may be either Equity of Preference shares.
It has to prepare the Memorandum of Association, Articles of Association and Prospectus and has to submit these documents with the Registrar of the companies to get the company registered.
It is compulsory for this company to register itself. The company gets registered with the Companies Act, 2013.
NUMBER OF DIRECTORS
This company must have minimum 3 directors.
It is required to hold the statutory meeting within 6 months of its getting Certificate of Incorporation and Certificate of Commencement of business.
USE OF WORD ‘LIMITED’
Every public company is required to use the word ‘Limited’ as suffix with its name.
CERTIFICATE REQUIRED TO START BUSINESS OPERATIONS
The public is required to get the Certificate of Incorporation as well as the Certificate of Commencement to start its business. Certificate of Incorporation is the conclusive evidence that:
- All the requirements of incorporation of the Act have been complied with in respect of registration.
- The company is duly registered
- That the company came into existence on the date mentioned in the certificate.
Certificate of Commencement is the conclusive evidence that the company can exercise its borrowing rights and it is entitled to start its business.