Quick answerA public limited company is incorporated under the Companies Act, 2013 through the SPICe+ form, with at least seven members and three directors, one of whom must have stayed in India for 182 days or more in the financial year. There is no minimum paid-up capital. Its name ends with "Limited", its shares are freely transferable, and an unlisted public company must issue securities in demat form. Independent directors and committees are required only above prescribed thresholds or on listing.
- Law
- Companies Act 2013, section 2(71)
- Minimum people
- 7 members, 3 directors
- Minimum capital
- No minimum
- Typical time
- 10 to 20 working days
When a public limited company makes sense
Most businesses start as private companies, and that is usually right. A public limited company is chosen when the business needs something a private company cannot offer:
- Wide ownership: a private company is capped at 200 members; a public company has no upper limit.
- Free transferability: shares of a public company are freely transferable, which suits large investor groups and cooperative-style ventures.
- Listing: only a public company can offer shares to the public through a prospectus and list on the main board or SME platform of a stock exchange, subject to SEBI regulations.
- Regulated sectors: some activities, such as a Nidhi company, must be run through a public company.
An existing business does not need to start afresh: a private company can become public through private to public company conversion.
Requirements at incorporation
| Requirement | Rule |
|---|
| Members | Minimum 7, no maximum. Members can be individuals or companies. |
| Directors | Minimum 3, maximum 15 (more by special resolution); at least one resident in India for 182 days in the financial year |
| Share capital | No minimum paid-up capital since the 2015 amendment |
| Name | Ends with "Limited"; must not be identical or too similar to an existing company, LLP or trademark |
| Securities | Must be issued in dematerialised form; an ISIN is obtained through a depository |
| Registered office | An address in India with proof and owner's no-objection letter |
Governance obligations: what applies and when
A newly incorporated unlisted public company with small capital does not need independent directors or board committees. These obligations switch on at thresholds measured from the last audited financial statements. The main ones are:
| Obligation | Applies to unlisted public companies with |
|---|
| At least 2 independent directors, audit committee, nomination and remuneration committee | Paid-up capital of ₹10 crore or more, or turnover of ₹100 crore or more, or outstanding loans, debentures and deposits above ₹50 crore |
| At least 1 woman director | Paid-up capital of ₹100 crore or more, or turnover of ₹300 crore or more |
| Key managerial personnel (MD or CEO, company secretary, CFO) | Paid-up capital of ₹10 crore or more |
| Secretarial audit | Paid-up capital of ₹50 crore or more, or turnover of ₹250 crore or more, or outstanding loans or borrowings of ₹100 crore or more |
Wholly owned subsidiaries, joint ventures and dormant companies have certain exemptions from the independent director rule. A listed company follows the stricter SEBI Listing Regulations in addition. We review these thresholds every year, so the company is ready before a requirement applies.
Incorporation procedure
- Name and DSC: name search and reservation, and digital signatures for directors and subscribers.
- Charter documents: we draft the memorandum and articles, including share transfer, borrowing and meeting provisions suitable for a wider shareholder base.
- SPICe+ filing: INC-32 with e-MOA, e-AOA and AGILE-PRO-S, with stamp duty paid online. DINs for new directors, PAN and TAN are allotted through the process.
- Certificate of incorporation: issued after scrutiny by the Central Registration Centre.
- Depository setup: agreements with NSDL and CDSL through a registrar and share transfer agent, and an ISIN for the shares.
- Commencement: INC-20A filed within 180 days, after subscribers pay for their shares.
Rules that bind public companies more tightly
Beyond the thresholds above, a public company accepts stricter rules from day one. Managerial remuneration is capped under section 197 as a percentage of net profits unless shareholders approve more. Borrowing beyond the paid-up capital and free reserves, and selling a substantial undertaking, need a special resolution under section 180. Loans to directors and related parties, and related-party transactions, face tighter conditions. Shares can be offered to more than 200 persons in a year only through a public issue, and private placements follow section 42.
None of this prevents a well-run company from operating smoothly, but the board must understand it from the start.
From incorporation to listing
Incorporating as a public company does not by itself allow you to raise money from the public. A public issue needs a prospectus that complies with the Companies Act and the SEBI (Issue of Capital and Disclosure Requirements) Regulations, a merchant banker, a track record that meets the eligibility conditions of the chosen platform, and approval of the stock exchange. Smaller businesses often look at the SME platforms of the stock exchanges, which have their own eligibility conditions on net worth, operating history and profitability.
Until then, an unlisted public company raises capital through rights issues, preferential allotments under section 62 and private placements under section 42, each with its own valuation, approval and filing requirements. We set up the company so that its records, demat holdings and governance are clean when the time comes for due diligence.
Mistakes to avoid
- Nominal shareholders: filling the seven-member requirement with people who have no real role creates problems later in signatures, meetings and transfers. Choose members who will stay engaged.
- Ignoring thresholds: once capital, turnover or borrowings cross a limit, independent directors, committees or a company secretary must be appointed within the time allowed. Missing this leads to penalties on the company and its officers.
- Physical share certificates: issuing paper shares in an unlisted public company breaches the demat rule and blocks later transfers.
Annual compliance
Every public company holds board meetings (at least four a year, with a gap of not more than 120 days), an annual general meeting within six months of the end of the financial year, a statutory audit, and files financial statements in AOC-4 and the annual return in MGT-7. Changes in directors, auditors, capital and charges have their own forms and deadlines. Our ROC annual compliance service tracks all of these.
Costs
Costs include DSCs, MCA fees and stamp duty (both linked to authorised capital, with stamp duty varying by state), depository and RTA charges for demat shares, and professional fees. We provide one written quote covering every head before work starts.
Documents you need
For each subscriber and director, and for the registered office:
- PAN card of every subscriber and director
- Aadhaar, passport, voter ID or driving licence
- Recent bank statement or utility bill as address proof
- Passport-size photographs
- For a corporate subscriber: board resolution and certificate of incorporation
- Registered office proof and no-objection letter from the owner
- Details of proposed shareholding and authorised capital
How we handle it for you
Structure review
We confirm that a public company is the right vehicle and plan the shareholding.
Name and DSC
Name search, reservation and digital signatures for all directors and subscribers.
Drafting and filing
Memorandum, articles and SPICe+ forms prepared and filed.
Demat setup
RTA appointment, depository connectivity and ISIN for the shares.
Governance map
A written map of thresholds and annual obligations for your board.
Why clients choose ProudLegal
Advocates who appear in courtYour matter is drafted and argued by enrolled advocates, not call-centre staff.
Company and tax filings in-houseCompany secretaries and tax professionals handle registrations and returns.
Fees agreed in writingYou receive a written fee quote before any work begins.
Updates on WhatsApp and emailEvery hearing date, filing and document is shared as it happens.
Please note: this page explains the law and procedure in general terms as on 30 October 2026. Fees, limits and timelines change, and the facts of each case matter, so take advice on your own papers before acting.
Frequently asked questions
How many members are needed for a public limited company?
At least seven members and at least three directors. There is no upper limit on the number of members.
Is there a minimum capital for a public limited company?
No. The minimum paid-up capital requirement of ₹5 lakh was removed by the Companies (Amendment) Act, 2015.
Do all public companies need independent directors?
No. An unlisted public company needs at least two independent directors only if it crosses the capital, turnover or borrowing thresholds in the rules. Listed companies must always have them.
Can a public limited company be unlisted?
Yes. Many public companies are unlisted. Listing is a separate decision made under SEBI regulations.
Must an unlisted public company issue shares in demat form?
Yes. Unlisted public companies must issue securities only in dematerialised form and facilitate dematerialisation of existing securities.
How long does incorporation take?
Usually 10 to 20 working days once documents and signatures are ready, depending on name approval and Registrar queries.
What annual return does a public company file?
A public company files the annual return in Form MGT-7 and its financial statements in AOC-4 after the annual general meeting.
Can a private company convert into a public company?
Yes, by passing a special resolution, altering its articles and name, meeting the minimum member and director requirements and filing with the Registrar.
