Conversion of Private Limited Company to Public Limited Company

Companies Act, 2013 allows conversion of companies from one from to other. Section 18 and Section 14 of the Companies Act, 2013 read and Rule 33 of Companies (Incorporation) Rules, 2014 deals with the conversion of companies already registered

A Company already registered under Companies Act 2013 in a class may convert itself as a company of another class by Alteration of Memorandum and Articles of the Company. An application in this regard is require to be made to Registrar.

Pre-requisites for Conversion

  • DSC for 1 Director
  • Minimum 7 Shareholders
  • DIN for all directors
  • Minimum Authorized Share Capital of Rs 5lacs
  • Minimum Paid up Share Capital of Rs.5 lacs
  • Director and shareholder can be the same person
  • Minimum 3 Directors

Pre-requisites for Conversion

Capital Raising : When a Company is listed on a recognized stock exchange market, it has the ability to attract more and more investors into the business. The amount of capital can be raised easily through public involvement.

Share Transfer : Easily transferability of shares provides liquidity in the hands of shareholders. The shareholders can sell the shares and benefit from its liquidity anytime as per their convenience. Biggest advantage for the Investor is that they are not bound to remain with the company forever.

Brand Recognition : Once the Company is listed on recognised stock exchange more and more people become aware about the business thereby leading to building brand recognition.

Procedure for Conversion of Private Limited Company into Public Limited Company

Conduct Board Meeting
The Board meeting shall be conducted to discuss the Agenda items

  • To approve conversion of Company into Public Company subject to approval of Shareholder
  • To approve conversion of Company into Public Company subject to approval of Shareholder
  • To adopt new set of Article of Association subject to approval of Shareholder
  • To adopt new set of Article of Association subject to approval of Shareholder
  • To approve notice for conveying Extraordinary General Meeting and authorize someone to circulate notice.

Issue notice for General Meeting
The notice shall be issued to the members as per the provisions of Companies Act, 2013. However, General Meeting can also be conducted at a shorter notice by taking approval of more than 95% of shareholders entitled to vote.

Conduct General Meeting
Convene General meeting as per provision of Secretarial Standard. Take necessary approval from Members by passing Special Resolution for the proposal of conversion and adoption of new set of Article of Association and Memorandum of Association (consent of atleast 75% of total persons present).

File E Form MGT-14
File MGT-14 within 30 days of passing Special Resolution with Registrar of Companies.

File E Form INC-27
File INC-27 within 15 days of passing Special Resolution with Registrar of Companies along with following attachments

After approval of E- Form MGT -14 and INC-27, if the Registrar of Companies find everything in order, he will issue the fresh certificate of Incorporation and will close the former registration of Company.

Post Conversion Compliances

After conversion of Private Company into a Public Company kindly take care of the following points

  • Intimate all the concerned authorities about the status change.
  • Arrange new PAN No. of the company. Update company bank account details.
  • Arrange new stationary with new name of the Company.
  • Analyze your newly adopted AOA and MOA and remove all things which are in contradiction with the conditions of AOA.
  • Raise the paid-up capital to minimum Rs. 5 lakhs, if the same is less than Rs. 5 lakhs.
  • Increase Number of Director to minimum 3 Directors
  • Name of the Company to be altered from “Private Limited” to “Public Limited/Limited” wherever mentioned.

Effect of conversion on Liabilities and Contractual Obligations

  • Liabilities won’t be affected.
  • Contractual Obligations won’t be affected.
  • Debts shall be enforceable in law as if no conversion has taken place.
  • Resulting Public Limited Company shall be liable for all liabilities, contracts and debts entered.

Documents Required

List of members and list of creditors.

Copy of PAN card and Aadhaar Card of the nominee and member/shareholder.

Latest Audited Balance Sheet and the Profit and Loss Account.

No Objection letter of every creditor.

Proof of identity of the nominee and member/shareholder: Self attested copy of Voters Identity Card/Aadhar Card Card/Passport/Driving license.

Residential proof of the nominee and member/shareholder: Self attested copy of Bank Statement/Electricity Bill/Mobile Bill/Telephone Bill.

Affidavits from the members

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Frequently Asked Questions

Whether change of name is required for conversion?

The suffix “Private Limited” will be replaced with “Limited.” For this change, the company has to seek permission from the shareholders and after that make the required changes in the MOA to get it amended.

How to alter MOA & AOA of the Company?

Once the name approval letter is received from the ROC, the MOA and AOA are required to be drafted. The name clause and capital clause are altered along with the removal of restriction to Private Company as provided by definition.

When can a company start its business operations as a Public Company?

The company can start its business operations as a Public Company on receipt of the fresh Certificate of Incorporation from ROC.

Whether a fresh GST registration is required for the Public Limited Company?

No. As the company’s PAN details remain same, there is no need of new registration. However, application of modification must be made for name change in records. Filingwale can help you apply for modification at an additional cost.

How long does it take to convert a Private Limited into Public Limited Company?

We at Filingwale can help you convert your Private limited into a Public Limited Company within 20-25 working days. The time taken for conversion will depend on the submission of relevant documents by the client and speed of Government Approvals. To ensure speedy conversion, one should ensure that all the required documents are submitted.