Public Limited Company is a company incorporated under the Companies Act, 2013, that may invite the public to subscribe for its shares, has no restriction on transfer of shares, and requires a minimum of seven members and three directors. Under Indian law, it is defined in Section 2(71) of the Companies Act, 2013, as any company that is not a private company.
Legal definition
Section 2(71) of the Companies Act, 2013 defines a public company:
"Public company" means a company which—
(a) is not a private company;
(b) has a minimum paid-up share capital as may be prescribed:
Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles.
The requirement of minimum paid-up share capital of five lakh rupees was removed by the Companies (Amendment) Act, 2015. A public company now has no prescribed minimum capital threshold for incorporation.
A public company requires a minimum of three directors under Section 149(1)(b), at least one of whom must be a woman director if the company is a listed company or has paid-up share capital of one hundred crore rupees or more. It must have a minimum of seven members under Section 3(1)(a), and there is no upper limit on membership.
Unlike private companies, public companies may issue shares to the public through a prospectus under Part I of Chapter III, and there is no restriction on the transferability of shares.
How courts have interpreted this term
Indian courts have addressed the nature and governance obligations of public companies in several important decisions.
Tata Consultancy Services Ltd. v. Cyrus Investments Pvt. Ltd. (2021) 9 SCC 449
The Supreme Court, in a four-judge bench decision led by Chief Justice S.A. Bobde, addressed oppression and mismanagement claims in the context of a Tata Sons — a company that converted from public to private status. The Court held that the rights of minority shareholders in a company that was previously public must be evaluated in the context of the company's historical governance framework. The decision extensively analysed the interplay between the rights of promoters and minority shareholders in closely held companies that operate at a scale comparable to public companies.
Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Ltd. (1981) 3 SCC 333
The Supreme Court held that the Board of Directors of a public company must exercise its powers in accordance with the Act and the company's articles. The Court underscored that actions taken in excess of the authority conferred by the articles or the statute are ultra vires and cannot bind the company. This decision established important parameters for the scope of board power in public companies.
Types of public limited company
Indian law recognises several sub-categories of public companies:
- Listed public company: A public company whose securities are listed on a recognised stock exchange (NSE/BSE). Subject to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in addition to the Companies Act.
- Unlisted public company: A public company that has not listed its securities on any stock exchange. Subject to the Companies Act but not SEBI LODR Regulations.
- Government company (Section 2(45)): A company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, any State Government, or partly by both. Always treated as a public company for governance purposes.
- Deemed public company: A subsidiary of a public company is deemed to be a public company even if its articles describe it as a private company, by virtue of the proviso to Section 2(71).
Why this matters
The public limited company is the corporate form chosen by India's largest businesses, conglomerates, and entities seeking to raise capital from public markets. Any company intending to list on the National Stock Exchange or the Bombay Stock Exchange must first be incorporated as, or converted to, a public company. This makes the public company form essential for accessing the equity capital markets, issuing debentures to the public, and operating at the scale required by India's regulatory infrastructure.
For practitioners, the distinction between public and private companies has significant compliance implications. Public companies face more stringent governance requirements: mandatory independent directors, audit committees, stakeholder relationship committees, vigil mechanisms, and compliance with secretarial standards. Listed public companies additionally face continuous disclosure obligations under SEBI regulations, including quarterly financial reporting, related party transaction approvals, and insider trading restrictions.
A common misunderstanding is that all public companies are listed. In fact, a substantial number of public companies in India remain unlisted — they have adopted the public company form either because they were formerly government companies, because they are subsidiaries of public companies (and hence deemed public), or because they exceeded the membership or share transfer thresholds that necessitated conversion from private to public status.
Related terms
Sibling structures:
Key components:
Related processes:
Frequently asked questions
What is the minimum number of members and directors for a public limited company?
A public limited company requires a minimum of seven members (with no maximum limit) and a minimum of three directors under Sections 3(1)(a) and 149(1)(b) of the Companies Act, 2013. At least one director must be an Indian resident who has stayed in India for not less than 182 days in the preceding calendar year.
Can a private limited company be converted into a public company?
Yes. A private company can convert to a public company by passing a special resolution to alter its articles of association, removing the three restrictions mandated by Section 2(68), and filing Form MGT-14 and Form INC-27 with the Registrar of Companies. The conversion takes effect upon the Registrar issuing a fresh certificate of incorporation.
What is the difference between a listed and an unlisted public company?
A listed public company has its securities traded on a recognised stock exchange (NSE or BSE) and must comply with SEBI (LODR) Regulations, 2015, including quarterly financial disclosures, corporate governance norms, and insider trading regulations. An unlisted public company is governed only by the Companies Act, 2013, and faces comparatively lighter regulatory requirements.
Is there a minimum capital requirement for a public limited company?
No. The earlier requirement of five lakh rupees minimum paid-up share capital was removed by the Companies (Amendment) Act, 2015, effective 29 May 2015. A public company can now be incorporated with any amount of share capital, though practical considerations — including listing requirements and credibility with investors — typically necessitate a substantially higher capitalisation.
Can a public company restrict the transfer of its shares?
No. Unlike private companies, a public company cannot impose restrictions on the transferability of its shares through its articles of association. Section 58(2) of the Companies Act, 2013 provides that the securities of a public company are freely transferable, and any refusal to register transfer must be based on sufficient cause communicated within 30 days.
This entry is part of the Veritect Indian Legal Glossary, a comprehensive reference of Indian legal terminology grounded in statutory text and judicial interpretation.
Last updated: 2026-03-27. Veritect provides this content for informational purposes and does not constitute legal advice.