Compliance-Public Limited Company

Once Company is registered as Public Limited Company, the next step is to follow the compliances prescribed by the Companies Act, 2013. The Public Limited Companies are classified in two that are Listed and Unlisted Public Limited Companies.

Compliance-Public Limited Company

What is a Public Limited Company?

A Public Limited Company is explained under Section 2(71) of the Companies Act, 2013[1]. Firstly, a Public Limited Company is a company that offers shares to the general public and has limited liability. Secondly, a Public Limited Company is required to publish its true financial status to its shareholders. It is also provided that a subsidiary company shall also be deemed to be a public company though it continues to function as a private company in its articles.

What is a Listed and Unlisted Company?

Listed Company

• A listed Company is explained in Section 2(52) of the Companies Act, 2013.

• A listed company means a company has its securities listed on any recognized Stock Exchange.

• A listed Companies shares can be traded in the stock exchange.

• A listed Company is recognized as a Public Limited Company because it makes an Initial Public Offering or IPO to sell its shares to the public and to get capital in return.

Unlisted Company

• An unlisted Company has not been explained in the Companies Act, 2013.

• An unlisted Company can be a Public Limited Company or a Private Limited Company.

• The shares of the unlisted companies are not available for the general public.

• An unlisted Company is not listed in any stock exchange because it does not have any limited number of shares.

• An unlisted Company can have an unlimited number of shareholders for raising capital for any commercial venture.

The term compliance describes the ability to comply with orders, set of rules, or requests.

A public limited company that has been incorporated in India must ensure the compliances concerning the Companies Act, 2013 are adequately met.

Company law provides legal compliance that are required to be followed by every company like reporting of financial results, reporting of changes in management, maintenance of statuary registers, auditing of accounts etc.

Mandatory Compliances

We have elaborated below such compliances which a Public limited company has to mandatorily ensure:

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Frequently Asked Questions

Q: What is the eligibility of designated partners/partners in an LLP?

Ans: Any individual, or even a company or an LLP, can become a partner. However, only an individual can become a ‘designated partner’ in an LLP.

Q: What is an LLP agreement?

Ans: An LLP agreement is made between the partners and the LLP regarding the relationship between the individual partners in the LLP. An LLP agreement usually consists of management policies, the inclusion of new partners, policy-making strategies, and so on.

Q: What kind of start-ups commonly register LLPs?

Ans: Typically, only start-ups that will not be looking for venture capital funding register LLPs. This is because venture capitalists only invest in Public and public limited companies.

Q: I am an NRI. Can I start an LLP business in India?

Ans: Yes, non-resident Indians and foreign nationals who are willing to enter into an LLP partnership can do so, provided they submit the necessary documents after getting them notarized by the concerned authorities. Although, at least one of the designated partners in an LLP should be an Indian national.

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