Core Eligibility and Composition
- Members: Minimum 2, maximum 200.
- Directors: Minimum 2; at least 1 resident director (in India for 182+ days in the previous calendar year).
- Foreign Participation: Foreign nationals/NRIs can be directors or shareholders, subject to sectoral FDI rules.
- Age: Practically 18+ to obtain DIN and sign documents.
- Capital: No minimum paid-up capital requirement (removed in 2015).
Registration Workflow (SPICe+ on MCA)
Incorporation is fully online via the Ministry of Corporate Affairs using SPICe+ (single window for name, company registration, and statutory IDs).
- Obtain DSC for proposed directors.
- SPICe+ Part A: Apply for name reservation.
- Draft MOA and AOA aligned to your business and cap table.
- SPICe+ Part B and AGILE-PRO-S: File incorporation, allot DINs, PAN, TAN, and apply for EPFO, ESIC, bank account, and optional GST.
- Receive Certificate of Incorporation with CIN; open the current account and commence operations.
Documents Typically Required
- Identity and address proofs of subscribers and directors (PAN, Aadhaar or passport, as applicable).
- Registered office proof (rent/ownership documents and owner’s NOC).
- MOA, AOA, subscriber sheets, director consents and declarations.
- Any state-specific stamp duty or supporting documents requested by the ROC.
Compliance Snapshot After Incorporation
- Maintain statutory registers, hold board meetings, and file annual forms (e.g., AOC-4, MGT-7A).
- Keep proper books of account and complete audit and income tax filings on time.
- Apply sectoral or local licenses as required (shops and establishment, trade, state-specific registrations).
GST and Other Registrations
GST is not automatically mandatory for every PLC; it is required upon crossing turnover thresholds or if you fall into compulsory registration categories. You can also opt to apply for GST during incorporation for business readiness.
- Thresholds: Commonly ₹40 lakh for goods and ₹20 lakh for services (state and category exceptions apply).
- Compulsory Cases: Inter-state supply, e-commerce operators, certain notified services.
- Optional: Apply via AGILE-PRO-S at incorporation for a seamless start.
Tax Update on Dividends
Dividend Distribution Tax was abolished from 1 April 2020. Dividends are now taxable in shareholders’ hands, and companies may need to deduct TDS where applicable.
Common Fixes to Frequent Misconceptions
- Citizenship: You do not have to be an Indian citizen to be a director or shareholder; ensure at least one resident director.
- Name Reservation: New incorporations use SPICe+ Part A (RUN is not used for fresh name reservation).
- Directors vs Employees: Directors are officers of the company; they are not automatically employees unless so appointed.
- Minimum Capital: The old ₹1 lakh minimum is no longer required.
- Public Offers: A private company cannot invite the public to subscribe (no IPO as a private company).
- Start Conditions: There is no rule like “90% share recovery needed to commence operations.”
PLC vs LLP vs OPC (Quick Comparison)
- PLC: 2–200 members, higher compliance, equity-friendly, private placements only, good for venture funding and ESOPs.
- LLP: 2+ partners, contract-driven, lower compliance, no share capital structure, suited for professional and service firms.
- OPC: 1 member, limited liability with single ownership, conversion thresholds apply as the business scales.
