Minimum Share Capital for Public Company: The 2026 Legal Roadmap
- Corpzo Ventures Private Limited
- Jan 22
- 4 min read
In the landscape of Indian corporate law, few topics spark as much confusion as the "Minimum Share Capital" requirement for a Public Limited Company. Historically, starting a public company felt like an elite endeavor reserved for those with deep pockets. However, the regulatory shifts of the last decade—culminating in the 2026 digital-first era—have democratized the process.
If you are an entrepreneur aiming for a public listing or a large-scale enterprise transition, understanding the distinction between Authorized Capital and Paid-up Capital is your first step. This guide clarifies exactly what the law demands in 2026.
The Big Shift: Is There Still a Minimum Requirement?
The short answer is: Statutorily, No. Under the original Companies Act, 2013, Section 2(71) defined a public company as one having a minimum paid-up share capital of ₹5 Lakhs. However, to boost the "Ease of Doing Business" in India, the government introduced the Companies (Amendment) Act, 2015. This amendment effectively abolished the mandatory minimum paid-up capital requirement for both private and public companies.
As of 2026:
Minimum Paid-up Capital: NIL (You can start with any amount, even ₹1,000).
Minimum Authorized Capital: While there is no legal floor, most founders start with an authorized capital of ₹5 Lakhs to maintain the traditional structure and accommodate the initial 7 shareholders.
Authorized Capital vs. Paid-up Capital: Know the Difference
For a Public Limited Company, managing these two figures is crucial for regulatory compliance and future fundraising.
Feature | Authorized Share Capital | Paid-up Share Capital |
Definition | The maximum amount of capital a company is legally allowed to raise by issuing shares. | The actual amount of money received by the company from its shareholders in exchange for shares. |
Mentioned In | Memorandum of Association (MOA). | Financial Statements / Balance Sheet. |
Stamp Duty | Paid to the government based on this limit during registration. | No additional stamp duty; it is part of the authorized limit. |
Flexibility | Can be increased later by filing Form SH-7. | Increases as and when the company issues more shares. |
Export to Sheets
Strategic Minimums: Why ₹5 Lakhs Still Matters
Even though the law doesn't force you to have ₹5 Lakhs, many professionals still recommend it as a "de facto" minimum for public companies for several reasons:
Credibility with Stakeholders: A public company is expected to operate on a larger scale. Having a negligible capital base (like ₹10,000) might raise eyebrows with banks, vendors, and institutional investors.
The 7-Shareholder Rule: A public company requires at least 7 members. If each member takes a meaningful stake, the capital naturally scales up.
Future IPO Readiness: If your goal is to eventually list on the BSE or NSE, those exchanges have their own stringent net-worth and capital requirements that far exceed the basic registration norms.
Other Structural "Minimums" for Public Companies
While the "Capital" hurdle has been lowered, other structural requirements remain mandatory. You cannot incorporate a public company in 2026 without meeting these thresholds:
Minimum Members: 7 Shareholders (No maximum limit).
Minimum Directors: 3 Directors (At least one must be a resident of India).
Digital Requirements: All directors must have a valid DIN (Director Identification Number) and DSC (Digital Signature Certificate).
Company Name: The name must end with the word "Limited" (unlike private companies which end in "Private Limited").
One of the perks of the current regime is the SPICe+ Part B fee structure. If your authorized capital is up to ₹15 Lakhs, the central government's filing fee for incorporation is often NIL or significantly reduced. However, you are still required to pay the State Stamp Duty, which varies based on the state where your registered office is located.
Example: Incorporating a public company in Delhi with ₹5 Lakhs authorized capital will be cheaper in terms of stamp duty than doing the same in Maharashtra or Karnataka.
Summary Checklist for 2026 Registration
Before you file your application on the MCA V3 Portal, ensure you have checked these boxes:
[ ] Name Approval: Reserve your name via the RUN (Reserve Unique Name) service.
[ ] MOA/AOA Drafting: Ensure the capital clause is clearly defined.
[ ] Subscriber Sheet: All 7 subscribers must sign the documents digitally.
[ ] Commencement of Business: Within 180 days of incorporation, you must file Form INC-20A to prove that the subscribers have paid the agreed-upon share capital into the company's bank account.
Conclusion: Focus on Scale, Not Just Compliance
The removal of the minimum share capital for public company registration is a testament to India's pro-entrepreneurship stance in 2026. It allows you to build your vision without locking up large sums of unproductive cash.
However, a public company is a vehicle for growth and public trust. While you can start with almost nothing, a well-capitalized foundation is the signal you send to the market that you are ready for the big leagues.
Need Help Structuring Your Public Company’s Capital?
At CorpZo, we specialize in high-growth corporate structuring. From choosing the right Authorized Capital to managing the SPICe+ filings and Director KYC, we ensure your Public Limited Company is compliant and "Investor-Ready" from Day 1.
Brand Name:- CorpZo
Address:- G 10, Sector 63, Noida, India, 201301,
Email:- reach@corpzo.com,
Phone:- +919999139391,
Web Address:- https://www.corpzo.com
Social Media Plateform
Comments