How to Start a Public Limited Company with Low Cost?

Starting a public limited company does not have to be expensive. With updated laws and supportive policies, businesses can now go public without draining their finances. It is an ideal way to build credibility, attract investors, and expand with confidence, while keeping your start-up costs low. Whether you are a growing brand or a first-time founder, going public is more accessible than ever. In this article, you will learn how to start operating a public limited company with low cost.

What is a Public Limited Company?

A Public Limited Company (PLC) is a business entity registered under the Companies Act, 2013 that offers its shares to the general public. These companies are listed on stock exchanges and can raise capital by selling shares to investors. A public limited company has limited liability, meaning shareholders are only liable up to the amount they invest. It requires at least seven members and three directors, with no upper limit on shareholders. PLCs must follow stricter compliance, file detailed financial reports, and maintain transparency. This structure suits medium to large businesses aiming for growth, public trust, and wider fundraising.

Basic Requirements to Start a Public Limited Company in India

Let us discuss the basic requirements to start a public limited company in India:

• Minimum Members and Directors

There must be at least seven shareholders and three directors in a public limited company. Among these directors, at least one must be an Indian resident. Shareholding is open to both Indian and foreign nationals under the permitted FDI rules.

• Share Capital Threshold

There is no minimum paid?up capital required. However, the minimum authorised share capital must be Rs. 100,000 (Rs. 1 lakh) when applying for incorporation, per the Companies Act and MCA guidelines following the 2015 amendment.

• Unique Name and Legal Documents

The company name must be distinct and not infringe trademarks or existing company names. Organisers need to prepare and submit the Memorandum of Association (MOA) and Articles of Association (AOA) outlining objectives and internal rules.

• Digital IDs and Paper Requirements

At least one director must hold a Digital Signature Certificate (DSC) to sign e-forms online. All the proposed directors should obtain a Director Identification Number (DIN). Additionally, identity and address proofs (PAN, Aadhaar, passport), photos, registered office proof, and landlord’s NOC must be submitted.

• Registered Office

The company must declare a registered office address in India, where documents and notices can be officially served. This can be residential or commercial, backed by a recent utility bill and a lease/purchase agreement.

Start Operating a Public Limited Company with Low Cost

Here is the process to start operating a public limited company with low cost:

Step 1: Secure Digital Identity

All proposed directors and subscribers must apply for a Digital Signature Certificate (DSC) to sign forms electronically. Costs range from Rs. 1,000–1,500 per DSC, and processing is quick, often within 1–2 days.

Step 2: Obtain Director Identification Number (DIN)

DIN is necessary for all directors. It can be obtained through the SPICe+ incorporation form, simplifying the registration process.

Step 3: Reserve Your Company Name

Choose and reserve a unique and compliant company name using SPICe+ Part A or RUN service on MCA’s portal. Be sure it doesn’t infringe any trademark or resemble existing names.

Step 4: Prepare Key Documents

Draft a Memorandum of Association (MoA) and Articles of Association (AoA) outlining your company’s purpose, governance, and rules. These are mandatory for incorporation.

Step 5: Gather Identity & Address Proof

Collect PAN card, Aadhaar or passport, passport-sized photos for directors and shareholders, plus utility bills (electricity, phone) and landlord NOC for your registered office. These documents authenticate your company’s identity and address.

Step 6: File SPICe+ Form

SPICe+ integrates all initial filing, DIN allotment, name reservation, MoA/AoA submission, PAN/TAN application, and aid with bank GST/EPF registrations. Fees for form filing range around Rs. 500, plus modest stamp duty depending on the state and nominal share capital.

Step 7: Receive Certificate of Incorporation

Once the Registrar reviews and approves the form, you will receive the Certificate of Incorporation containing your CIN, company name, and date of formation.

Step 8: Finalise Post-Incorporation Formalities

Apply for PAN and TAN, as this often occurs automatically via SPICe+. You must also do the following:

• Declare Company Commencement (Form INC-20A) within 180 days
• Open a bank account in the company’s name
• Register under GST, EPFO, ESI, and professional tax as needed

Cost-Effective Strategy to Set Up a Public Limited Company

Launching a public limited company doesn’t require breaking the bank. Here is how you can save smartly at each stage:

Leverage Digital Filings & SPICe+

Use the MCA’s SPICe+ form to complete all incorporation needs—DIN, name reservation, MoA/AoA filing, PAN/TAN, online in one go. Government filing fees are minimal; for share capital up to Rs.1 lakh, it is nearly free.

Keep Authorised Share Capital Low

India’s 2015 amendment removed paid?up capital requirements, but a minimum authorised capital of Rs.1 lakh still helps save on stamp duty. Lower share capital means lower state stamp charges—sometimes just a few thousand rupees.

Opt for DIY for Routine Tasks

Handle simple tasks yourself where possible:

• Obtain DSCs online (Rs. 1000 – 1500 each)
• Check and reserve your company name
• Gather and upload basic identity, address proofs, and the office NOC

These steps reduce reliance on professional services, as many Reddit founders suggest DIY is doable and can save Rs. 5000–8000.

Bundle Professional Services Wisely

Use fixed-cost CA/CS packages for content like MoA/AoA, SPICe+ filing, and GST registration. Typical bundled fees start around Rs. 10,000 –15,000, avoiding open-ended billing. Start-up India recognition may give fee rebates.

Minimise Stamp Duty Fees

Stamp duty varies by state. By keeping authorised capital low, you reduce stamp duty on MoA/AoA—coupling it with low-cost e-stamping, you can limit this to Rs. 2000–5000.

Avoid Unnecessary Add?on Services

Separate essentials from extras. Reviews show founders often pay Rs. 1000 extra for things like Udyam or DSC renewals, which they could do themselves. Skip marketing packages and pitch decks until your needs are confirmed.

Use Virtual Office & Home Address

Rent a small space, a coworking hot desk, or your own residence as the registered office to avoid high rental costs—Rs.1000 – 10,000/month instead of Rs. 20,000 for commercial space

Plan Compliance to Avoid Penalties

Late form filings attract Rs. 100–500 per day. Scheduling uploads early prevents fines and rework. Yearly returns, TDS, GST, and audits can be bundled under one CA/CS package (Rs. 10,000 – 30,000 annually).

Track Hidden Compliance Costs

Apart from filing, budget Rs. 5000 – 10,000 annually for audit, bank KYC, and routine returns. Early estimates plus bundled CA packages help you avoid surprise costs.

Benefits of Starting a Public Limited Company with a Low Cost

Let us discuss the benefits of starting a public limited company with low cost:

• Limited Liability Protection: A private limited company offers a safety net, and your personal assets are not at risk if the business faces financial or legal trouble. Shareholders are responsible only up to the amount they invest, protecting homes and savings.
• Separate Legal Identity: Once registered, the company becomes its own legal person. It can enter into contracts, own property, and take legal actions. This separation builds business credibility and ensures continuity even if stakeholders change.
• No Minimum Paid-up Capital: Recent amendments to the Companies Act removed the need for any minimum paid-up capital. You can start with a small amount, which makes it affordable for small businesses and start-ups to begin their journey with minimal cost.
• Lower Stamp Duty: With a low authorised capital of Rs. 1 lakh, you save significantly on stamp duty and incorporation charges specific to your state. This makes the setup easier without burdensome initial fees.
• Easier Fundraising: Private limited companies find it easier to raise money from venture capitalists, angel investors, or banks. They can also issue additional shares when needed, making funding flexible and scalable as you grow.
• Perpetual Succession: The company lives on even if shareholders or directors change, retire, or pass away. This stability boosts investor confidence and makes long-term planning smoother.
• Credibility & Brand Appeal: A legally registered private company projects professionalism and trust. It improves your business image with clients, suppliers, and investors, helping you secure partnerships and larger contracts.
• Greater Tax Benefits: Private companies enjoy tax perks, including lower corporate tax rates (25% for certain turnovers), deductions on salaries, rent, utilities, and potential start-up exemptions. Losses may also be carried forward, which can be up to eight years.
• Employee Incentives Through Shares: Private limited companies can offer Employee Stock Option Plans (ESOPs) and sweat equity to attract and retain talent. This helps align employee and company goals without a heavy financial outlay.
• Efficient Ownership Transfer: Shares (and thus ownership) can be transferred smoothly, offering flexibility for exit, succession, or new partnerships. This makes the structure ideal for growing teams and future investors.

Common Mistakes to Avoid in Public Limited Company Setup

Launching a public limited company is exciting, but skipping small steps can lead to big trouble. Here are the common mistakes to avoid in a public limited company setup:

1. Choosing the Wrong Business Structure: Opting for a structure that doesn’t fit your goals can hinder operations. Public companies require more compliance and at least seven shareholders and three directors. Be sure this structure matches your long-term vision.
2. Rushing or Skipping Name and Trademark Checks: A brand name that is too similar to existing companies or trademarks gets rejected and may lead to legal issues later. Always perform both the MCA name search and the trademark search before choosing a name.
3. Incomplete or Incorrect Documentation: Missing or mismatched documents, like MoA, AoA, address proof, DSC, or DIN, can delay approval. Always cross-verify your KYC and address proofs with submitted forms to avoid rejections or delays.
4. Ignoring Pre-Filing Requirements: Skipping essential steps like a landlord NOC or notarised affidavits is a common oversight. Ensure all pre-requisites are met before filing SPICe+ to avoid form rejection.
5. Improperly Drafted MoA/AoA: A vague or non-compliant MoA/AoA can block routine tasks like setting up bank accounts or securing funding. Use clear, updated templates, or get legal advice when drafting these key documents.
6. Wrongly Appointing Directors: Only select directors who are legally eligible, actively involved, and understand their duties. Picking directors casually, such as friends, without clarity, can cause governance issues or even legal trouble.
7. Using a Home Address Unwisely: Using your personal address works initially, but moving without updating MCA can lead to non-compliance. Choose a stable office location or ensure timely filings when you change addresses.
8. Underestimating Compliance & Tax Registrations: Register for tax registrations like PAN, TAN, GST, Professional Tax, EPF/ESI early—many entrepreneurs face penalties and business disruptions for missing these steps.
9. Overlooking IP Protection: Failing to register trademarks or protect domain names can put your brand at risk. Secure your intellectual property before launching publicly.
10. Trying to DIY Everything: Although DIY may seem cheaper, errors in filings like MoA, AoA, or SPICe+ can cost more time and money. Professional support—even minimal—can prevent big headaches.

Starting a public limited company doesn't have to be expensive. With the right strategy, smart planning, and digital tools, you can launch a credible, growth-ready business without overspending. From legal protection to investor trust, the benefits are big, even on a budget. Embrace the cost-effective route and unlock new opportunities while staying compliant and future-focused. This article provided you with detailed information on how to start operating a public limited company with low cost. Contact Online Legal India to get assistance and support in filing a public limited company registration from professional experts.