Legal requirement

Public Limited company

• A Public Limited Company registration in India is the best suitable business
structure for entrepreneurs who are planning for large-scale business operations.
To register a Public Limited Company in India there should be a minimum of
seven members and there is no limit on the maximum number of
members/shareholders for starting a Public Limited Company.
• The shares can be acquired by anyone through initial public offerings or through
stock market trade. Such offerings are beneficial in raising capital for the
company. The rules and regulations are most stringent as compared to the Private
limited company. This is because the funds invested in the company also belong to
the public.
Public Limited Company registration process
1.Minimum 7 shareholders and 3 directors are required
2.The minimum share capital of Rs. 5 lakhs
3.At least one Director's DSC (Digital signature certificate) at the time of submission of identity
and address proof
4.DIN of proposed directors
5.For choosing the company name an application shall be furnished
6.An application stating the company's prime object clause shall be furnished, defining what a
company will perform after its formation.
7.The application shall be submitted to ROC along with MOA, AOA, duly filled Form DIR-12,
Form INC-7 and Form INC-22.
8.Prescribed registration fees shall be paid to the ROC
9.After obtaining ROC approval, the company shall register for the commencement of business
certificate.
One Person Company (OPC)concept
• As per provision of section 2(62) of the Companies Act, 2013 defined
(62) “one person company” means a company which has only one
person as member.
FORMATION OF OPC [Rule 3]
• Only a natural person who is an Indian citizen and resident in India­­-
•  shall be eligible to incorporate a One Person Company;
• shall be a nominee for the sole member of a One Person Company.
• The term “resident in India” means a person who has stayed in India
for a period of not less 182 days immediately preceding one calendar
year.
SALIENT FEATURES OF OPC
• One person cannot incorporate more than one OPC or become
nominee in more than one OPC.
• No minor shall become member or nominee of the One Person
Company or hold share with beneficial interest.
• No such company can convert voluntarily into any kind of company
unless 2 years have expired from the date of incorporation, except in
cases where capital or turnover threshold limits are reached.
• It must have only one member at any point of time and may have only
one director.
PRIVILEGES AVAILABLE TO OPC

• The most significant reason for shareholders to incorporate the ‘single-person company’ is certainly the
desire for the limited liability.
• Businesses currently run under the proprietorship model could get converted into OPCs without any
difficulty.
• Mandatory rotation of auditor after expiry of maximum term is not applicable.
• One Person Company needs to have minimum of one director
• . It can have directors up to a maximum of 15 which can also be increased by passing a special resolution as
in case of any other company.
• The provisions of Section 98 and Sections 100 to 111 (both inclusive), relating to holding of general
meetings, shall not apply to a One Person Company.
• Minimum authorized share capital required for One Person Company having share capital is Rs. 1,00,000/-.
• Minimum and maximum number of members for One Person Company is one only
Not for profit organisation
• Section 8 Company is also a company that is registered for charitable or non-
profit purposes. However, this Company is similar to a Trust or Society; an
exception is that a Section 8 Company is registered under the “Ministry of
Corporate Affairs (MCA)” of the Central Government while the Societies
and Trusts are registered under the regulations of the State Government.
• However, this has numerous advantages as compared to Trust or Society and
also has better credibility among donors, departments of government, and
other stakeholders. Further, the key feature of this Company is that it is
possible to incorporate the company name without using the word “Limited”
or “Private Limited” as the case may be.
Characteristics of Section 8 company :
• Incorporate for social welfare
This type of company incorporated for charity, social welfare,
social promotion, their main aim is to promote social welfare and
work for society, not to earn profits. Their main objects depict the
reasons for their incorporation, objects are like Sports, Promote
commerce, art, science,  education, research, social welfare,
religion, charity, protection of the environment, or any such other
object.
• No minimum capital: As compared to other companies, section 8 companies
don’t require any prescribed minimum paid-up share capital.
• Licensed by government These types of companies are licensed by the central
government under section 8 of the companies act 2013 and these companies
work for society and receive a donation from other general public for the
welfare work.
• Limited liability: Section 8 company also forms as a private limited or public
limited company having limited liability. Members of this company have
limited liability as per their share subscribed.
• No dividend distribution This form of company’s doesn’t issue a dividend to
its members, because it is restricted from the law. They cannot distribute their
earned profit as dividends to its member; they can use their profit in promoting
their business objectives.
Advantages of Section 8 Companies:
• Distinct Identity- An entity means something that has a true existence; an object with a distinct existence. A company is a
legal entity and a legal entity established under the Law. Hence a company is a form of the organization having broad
legal potential and that may own property and also incur debts in its own name. The members of the company have no
liability towards company debts because the company and members both are the separate people in the eye of the law,
hence the company is an artificial person having a separate legal identity.
• Liability is Limited- Limited Liability means the status of being legally responsible for a company’s debts only to a
limited sum. Like proprietorships and partnerships, the Member’s responsibility for the company’s debts is limited in a
limited liability company. In other words, the responsibility of a company’s members is limited only to the sum of the
face value of the shares they take over
• No Minimum Capital- Required As per the point of view of incorporation, there is no minimum capital required for
incorporating a private limited company. As per company law 2013, you can start a private limited company with 0 paid-
up capital
• Less stamp duty: While incorporating section 8 companies there is minimum stamp duty livable. The government give
privileges to section 8 on the incorporation of the company, hence it charges less stamp duty on incorporation.
• No suffix- Section 8 companies may not use suffixes like the private limited company or limited company, it is optional
for them.