Setting up a business as a public company is a significant and complex endeavor that involves transforming a privately held enterprise into a publicly traded entity. This transition allows the company to offer shares of stock to the general public and raise capital through the sale of these shares on stock exchanges.

Key points for consideration

• Governing Act- Public companies are governed by the Companies Act, 2013. The Directors are liable for defaults made under the act.
• Number of Member- A minimum of seven members is required, and there is no maximum limit for members in a Public Company in India.
• Number of Directors- A minimum of 3 and maximum of 15 directors are required in a Public Company. However, for maximum of 15 directors, the company needs to pass the special resolution, and they need to appoint a woman director as well as one Resident director.
• Subscription of shares- In a Private Company, public subscription is allowed.
• Issue of prospectus- It is mandatory for a Public Company to issue a prospectus.
• Annual Statutory Filings- Filing the Annual Statement of accounts and annual returns with Registrar of Companies.

Documents required to establish a Private Company in India

• Articles of Association (“AOA”)
• Memorandum of Association (“MOA”)
• Proof of registered office address, lease agreement, No Objection Certificate (“NOC”) from the owner, and utility bill not older than 2 months
• Consent or declaration Form from the first director and first subscribers
• Interest of first Director in another entity, and also there subscriber rights
• Proof of identity and address of subscriber, Nominee Director, and Director(s), and
• Proof of identity and address of the witness to MOA and AOA (not required in cases where the witness is a professional, such as Chartered Accountant/ Company Secretary)

Registration Regime of a Private Company

The registration regime for a public company involves several key steps, summarized below:

• Legal Structure: Choose a suitable legal structure (e.g., corporation) and ensure compliance with applicable corporate laws and regulations.
• Board of Directors: Establish a board of directors with a mix of independent members to oversee the company’s affairs.
• Securities and Exchange Commission (“SEC”) Filings: Prepare and file registration statements and prospectuses with the SEC, providing detailed financial and operational information.
• Underwriting: Engage investment banks or underwriters to assist with the IPO and the sale of shares to the public.
• Roadshow: Conduct a roadshow to attract potential investors and generate interest in the IPO.
• Stock Exchange Listing: Obtain approval and list the company’s shares on a stock exchange for public trading.
• Ongoing Compliance: Comply with SEC regulations, including regular financial reporting, disclosure of material events, and adherence to corporate governance standards.
• Shareholder Relations: Engage with shareholders through meetings, reports, and transparency to maintain good relations.
• Market Performance: Monitor the company’s stock performance and overall market value.
• Continuous Disclosure: Maintain ongoing transparency and reporting to regulators and investors.

How can we help?

We provide comprehensive assistance for establishing your business as a public company in India, guiding you through the legal, regulatory, and financial complexities. Our services encompass filings, compliance with Indian corporate laws, investor relations, and stock exchange listing.