Fill required basic details and upload documents
Payment of service and government fee for the service selected
An expert will be assigned to your service.
Be Relaxed. We’ll get it done for you & update.
Converting a private limited company to a public limited company is a simple and straightforward process. What needs to be done is that to pass the resolution in the board meeting and the general meeting for the same. A special resolution is required for this process. A special resolution would include more than three quarters or majority of vote of the members.
There is a question which generally comes across “Why Go Public”? Reason is that there are many benefits of converting a private limited company to a public limited company.:
The process of converting a private limited company to a public limited company is governed by the Companies Act, 2013 and the Companies (Incorporation) Amendment Rules, 2020. Let us have a brief understanding of what is private and public limited company.
Private Limited Company: A company that is privately held for small businesses. The liability of the members of a private limited company is restricted to the number of shares respectively held by them. The shares of a private limited company can’t be traded.
Public Limited Company; A company whose shares are traded on a stock exchange and can be purchased and traded by anyone. It is also called a publicly held company. As the name suggests, a public limited company is a company that offers company shares to the general public. The Company’s Act 2013 also defines a public limited company as one that has limited liability and offers company shares to the public. Anyone can acquire the stocks of such a company either through stock-market trading or via IPOs (Initial Public Offerings).
The following process and procedure has to be considered for conversion of private limited to public limited company:
Notice for Board Meeting- A notice must be provided by the directors of the private company to hold a board meeting. The notice must be provided seven days before the meeting. The agenda of the meeting must be decided in this notice. The following items must be considered in the agenda of the board meeting:
Hold the Board Meeting – In the next step the company has to hold the board meeting. In the board meeting the following has to be approved:
Provide the Notice to Hold EGM-
In the next step of the board meeting, the directors have to provide notice to all the shareholders to hold the Extra-ordinary general meeting (EGM) at least 21 days before the meeting. For calculating the period, 21 clear days notice is required to be provided.
Hold the EGM-
In the next step, an EGM must be held by the company. Here a special resolution which requires the vote of the majority must be considered to be passed. Along with this the approved MOA and AOA must be considered by the directors of the meeting.
File MGT -14 with the Respective authority-
his form has to be filed with the RoC within 30 days of passing the respective resolutions along with the prescribed fees. The form is be filed on the MCA portal, with the following attachments:
File INC -27 with the Respective Authority-
This form is specifically for the application for conversion of a private limited company into a public limited company. This form has to be filed with the RoC within 15 days after passing of the resolutions in the EGM. The following documents are to be enclosed along with the form:
Approve MGT-14 and INC-27-
In the next step, the ROC will verify whether the particulars related to the MGT and INC have been carried out as per the requirements of the Companies Act, 2013. If there are no issues with this then the ROC will approve the forms.
Provide Certificate of Incorporation-
After the process of approval, the ROC will provide the Certificate of Incorporation to the newly formed company.
After conversion of Private Company into a Public Company kindly take care of the following points:
The following documents are required for conversion of private limited to public limited company:
The following forms are required for conversion of private limited to public limited company:
Listing of Shares: Through conversion of private limited to public limited company, the business can list its shares in a recognized stock exchange. It would be crucial for a company that wants to raise funds.
Raise Investment through the Public: By listing the shares in a stock exchange the company can raise investment through the public. Different forms of shares can be utilized for this purpose. The company can raise investment though preference shares, equity shares or other forms of shares.
Shares can be transferred: By going for the process of conversion of private limited to public limited company; the shares can be easily transferred from one shareholder to another shareholder. This would not be possible if the company is registered as a private limited company.
Increase in Reputation: Conversion of private limited to public limited company would increase the reputation of the company. A public limited company is allowed to list its shares in the public stock exchange. Automatically this process of listing the shares in the public stock exchange would increase the reputation of the company.
Acceptance of Deposits: Any public company is allowed to accept deposits under section 76 of the Companies Act, 2013.
The initial public offering (IPO) is the process by which a private company can go public by... Read More02 Aug, 2021
By Admin Taxupp