Procedure for Registration of a Public Limited Company
A Public Limited Company, in addition to the steps followed by a Private Limited Company has to obtain a certificate of Commencement of Business before they can commence the business.
To obtain Commencement of Business Certificate after incorporation of the company the public company has to:-
File a declaration of compliance with the provisions of Section 149(2)(b) of the Act ine-Form 20 and attach the statement in lieu of the prospectus(schedule III)
OR
File a declaration of compliance with the provisions of Section 149 (1)(a),(b),(c) of the Act in e-Form 19 and attach the prospectus (Schedule II) to it.
Section 149 of the Act, explains the Restrictions on the commencement of Business:-
Where a company having a share capital has issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing powers, unless -
(a) shares held subject to the payment of the whole amount thereof in cash have been allotted to an amount not less in the whole than the minimum subscription;
(b) every director of the company has paid to the company, on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares offered for public subscription;
(c) no money is, or may become, liable to be repaid to applicants for any shares or debentures which have been offered for public subscription by reason of any failure to apply for, or to obtain, permission for the shares or debentures to be dealt in on any recognized stock exchange.
149(2)(b):- Where a company having a share capital has not issued a prospectus inviting the public to subscribe for its shares the company shall not commence any business or exercise any borrowing powers, unless every director of the company has paid to the company, on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares payable in cash.
