Private Limited to Public Limited Company

PRIVATE LIMITED TO PUBLIC LIMITED COMPANY

The conversion of Private Limited Company into Public Limited Company becomes effective on the date of approval by Registrar of Companies and issues Fresh Certificate of Incorporation.
The Companies Act, 2013 provides for converting a Public Company to a Private Company by altering the MOA and AOA of the company.

Advantages

There are several advantages of converting a private limited company into a public limited company, especially when the size of the company in terms of capital requirement and turnover is large enough to generate the need for public funding. Following are some reasons for which private limited company should be converted into a public limited company:
  1. A Private company is an organization where the number of members is not more than 200 and cannot invite the public to subscribe to its shares whereas a Public Company has seven or more members, and can invite and accept public to subscribe to its shares
  2. A subsidiary company of a Public company is deemed to be a public company
  3. If a private company goes public then the risk is also shared among the shareholders
  4. Only a public limited company can be listed on a recognized stock exchange
  5. A public company can take a deposit from the public.

Important Legal Provision

Private company means a company which by its Articles of Association:-

  1. impose restrictions on the right to transfer its shares.
  2. except in case of One Person Company, limits the number of its members to two hundred.

A company may, by a special resolution, alter its articles and ca convert —

  1. a private company into a public company; or
  2. a public company into a private company.

Provided that where a company being a private company alters its articles in such a way that they no longer include the restrictions and limitations (as given above) which are required to be included in the articles of a private company under this Act, the company shall, as from the date of such alteration, cease to be a private company.

Prepare ESOP Scheme

Board Meetings

Convene board meeting discuss following matters.

  • To get Directors approval for Conversion of Company .
  • Fix date, time and place for holding Extra-ordinary General meeting (EGM) to get approval of members by way of Special Resolution, for Conversion Company and to alter Memorandum and Articles of Association of the company.
  • To approve notice of EGM along with Explanatory Statement to be attached to the notice of General Meeting.
  • To authorize the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM).
  • To approve the new draft set of Memorandum of Association and Articles of Association complying the requirements of One Person Company, if any.
  • Prepare minutes of such Board Meeting.
  • ROC FILING

    File necessary e-Forms along with attachments with Registrar of Companies.

  • Form MGT-14 for filling special resolution with following attachments.
    1. Altered Articles of Association
    2. Altered Memorandum of Association
    3. Notice of General Meeting along with explanatory statement
    4. Copy of Special Resolution
  • Form INC-27 for applying Central Government for conversion of Company with following attachments.
    1. Notice of General Meeting
    2. Altered Memorandum of Association
    3. Altered Articles of Association
    4. Copy of Special Resolution
    5. Minutes of Extra Ordinary General Meeting
    6. List of members with number of shares held, details of members voting in favor of and against the resolution and abstain from voting.
    New Certificate

    On approval of Form MGT-14 and Form INC-27 ROC issues new Certificate of Incorporation containing new name.

    NOTICE

    Issue Notice of the Extra-ordinary General meeting (EOGM) to all Members, Directors, the Auditors and to all other persons entitled to such notice.

    GENERAL MEETING

    Convene Extra-Ordinary General Meeting of the members of the Company at place & time mentioned in Notice to transact following businesses.

  • Conversion of Private Limited Company into One Person Company.
  • Alterations of the Memorandum of Association of the Company.
  • Alterations in Articles of Association of the Company including removal of restriction applicable to Private Limited Company as given above in Point No. 2 of “Important Legal Provision” .
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