Conversion of a Private Company into a Public Company | Enterslice

A Public Company has seven or more members and can invite the public to subscribe to its shares. A subsidiary company of a Public company is deemed to be a public company.

A Private company is an organization that limits its number of members to 200 and cannot invite the public to subscribe to its shares. The Companies Act, 2013 provides for converting a Public Company to a Private Company by altering the MOA and AOA of the company.

The main advantage of Public companies is that it can raise reserves on a large scale without approaching the banking system and reducing debt whereas Private Companies which are privately owned, all the reserves are raised by existing members, shareholders, and promoters. If a private company goes public then the risk is also shared among the shareholders. Public companies once recorded, get indirect promotions and support through stock exchange websites where their stocks are recorded.

Private to Public Limited Company

It's great news that you're looking to go public. The process to convert from private to a public limited company is simple, but will take 30 to 35 days to complete, as there are many steps involved. First, you need to alter the articles of association, then delete the word private from your name, commence the registration process and finally wait for the certificate of commencement of business. Do note, however, that some requirements and charges will depend on whether or not you already have three directors, seven members (shareholders) and a paid-up capital of Rs. 5 lakh (all are necessary for a public limited company).

Advantages of Public Limited Company

Quick Share Transfer: Shareholders of a public limited company can transfer their shares with great ease. All they need to do is file the share transfer form and hand over the share certificate to the buyer. The process of transferring your share in other business structures is hugely tedious.

Raise Capital: The big advantage of the public limited structure is that you can leverage it to raise capital from the general public through shares. This would, however, require listing on a stock exchange. All public limited companies can issue fixed deposits, debentures, convertible debentures to the general public.

Greater Credibility: Public limited companies need to disclose their audited statements of accounts, inform the regulatory bodies of any structural change and hold annual general body meetings for all shareholders. It's tedious but these compliances bring a public limited company a great deal of credibility to the organization.

Procedure for Conversion of Private Limited Company into a private limited company

Registration Procedure For Convert a Private Limited to a Public Limited: 

Enterslice will help you to convert a Private Limited to Public Limited company from the comfort of your home, offering you services that are very specialized and tailored for each individual.

Step-1: You sign up for our Conversion from Private Limited Company to Public Limited Company service, and our financial & legal experts engage in consultations with you in order to collect the necessary information and work on the same

Step-2: Post consultations, our team shares a draft of required actions with you, preparing the necessary documentation such as the Board Resolutions

Step-3: Once the Resolutions are passed and all necessary documentation is compiled, our legal experts take care of the filing with the ROC

Required Documents For Convert a Private Limited To a Public Limited

The documents required in order to effect a change from a Private to a Public Company are –

• Altered memorandum and articles of association.

Notice of Extra-Ordinary General Meeting (EGM) which was held to pass the board resolution indicating the approval of Directors for the conversion of a Private Limited Company to Public Limited Company.

• Special resolution for conversion of the company into a public company is to be filed with the following attachments.
• A certified true copy of the special resolution approving such conversion.
• Form INC 27 – Application for the conversion of Private Limited to Public Limited.
• Form MGT 14.
• Minutes of the Meeting where approval was given for conversion.