It is a mamoth task to close a Listed Company in India. To do so, you require the necessary incorporation expertise from seasoned professionals. For such purposes, Registrationwala have a dedicated Operations Team which facilitate in your company closure procedure.
Get the board resolution
Get the consent of board members/creditors
File the application
Publish the company closure
Close the company
A Public Limited Company should be the preferred business choice in India if you plan to raise funds from the general public through Initial Public Offering ("IPO") because Public Limited Companies have been privileged under Securities Laws to access the capital market.
Public Limited Companies in India are considered to have a more transparent business model than other business structures. It allows investors to transfer their ownership in the Company without the hassle of just selling the shares. Public Limited Companies in India are a destination point for Foreign Direct Investment ("FDI") because, under Foreign Exchange Laws, there are areas open for Public Limited Companies to attract foreign loans and equity participation.
A Public Limited Company has the following features:
Flexible Structure: A Public Limited Company has the most flexible structure of all Company types. It allows a significant degree of separation between operations and ownership.
Stock Ownership: A Public Company can provide stock ownership or ESOPS to employees. Only Limited Companies are allowed to offer this feature of distributing their stocks among current and prospective employees.
Stock Exchange Listing: Only Public Limited Companies can list their shares on Indian Stock Exchanges such as National Stock Exchange (NSE), Bombay Stock Exchange (BSE), etc. Therefore, the general public can invest in the Company by purchasing its stocks.
Raising Funds through IPOs: Only Public Limited Companies can accept Deposits from the Public under the Companies Act, 2013. This way, the Company can raise more capital for its business operations and size expansion.
A Public Limited Company, legally known as PLC, is a publicly held company. It is a limited company whose shares can be traded with the public. PLC can be listed or not listed on the stock exchanges. PLC requires a minimum of 3 Directors as a prerequisite.
A Public Limited Company may be closed voluntarily by the shareholders or compulsorily by the judiciary. Registrationwala provides thorough services during this difficult transition of closing a Public Limited Company in India.
This is possible if,
This happens in the following scenarios,
The following documents are to be submitted to close a Public Limited Company.
The Company that wishes to close must file a closing application with the Registrar
The Public Limited Company must submit the resolution of closing approved by the board members
The Company or its representatives must arrange the consent from all its listed creditors for the closure of the public limited Company.
A letter of consent from the Directors stating their opinion to close the Public Limited Company must be submitted.
The Company must instruct all its appointed directors to draft and prepare an affidavit for the closure of the PLC.
A financial statement indicating the sold-off assets and cleared debts must be submitted.
The dissolution of a Public Limited Company consists of three main stages:
To dissolve a Company, at least 2/3rd of the shareholders must adopt the resolution. The management must submit an application to the Register of Companies along with the resolution of dissolution, the minutes of the general meeting
The dissolution resolution and application submission are followed by Liquidation, in a series of steps.
A liquidator's appointment is either a management member or a separate liquidator appointed by the judicial. The liquidator submits the application of dissolution to the Registrar.
Publication of a notice regarding the Liquidation of Public Limited Company is sent out, specifying the creditors.
Submit an annual report and opening balance sheet to the Registrar upon Liquidation.
If the assets of the Public Limited Company being liquidated are insufficient to satisfy all of the requirements of the creditors, the liquidators must file a bankruptcy petition. Suppose a creditor known to the public limited Company has not presented a demand and cannot be satisfied due to reasons independent of the public limited Company. In that case, the funds belonging to the creditor shall be deposited in escrow if possible.
Preparation of the final balance sheets of Public Limited Company and distribution of remaining assets according to the plan prepared by the liquidators is the final step of Liquidation. The assets may be distributed after six months have passed since the dissolution of the Public Limited Company was entered into the Commercial Register and the liquidation notice published. After two months have passed since the shareholders were notified of the final balance sheet and asset distribution plan presentation.
After the Public Limited Company has been liquidated as required, the company management board will have to submit an application to the Register to delete the Company from the Commercial Register. This can be done after a minimum of six months of the entry of the dissolution of the public limited Company into the Register and providing notification thereof along with a final balance sheet and asset distribution plan to the application for deletion from the Register.
Liquidation of a Public Limited Company is a fairly time-consuming process that lasts at least six months. The activities of a dissolved Public Limited Company can be continued, or a merger, division or transformation of the Company may also be conducted. To do so, the liquidators must submit to the Commercial Register an application for continuing the Company's activities.
We at Registrationwala provide end-to-end solutions for filing Closing Public Limited Companies. Our services include:
Registrationwala.com is a leading legal consultancy firm providing comprehensive services relating to Closing Public Limited Companies.
Contact us now for dissolving a Public Limited Company in India.
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