Conversion of Private Limited Company to LLP

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Conversion of Private Limited Company To Public Limited Company

             A Public Company has seven or more members and can invite 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 which limits its number of members to 200 and cannot invite 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 fundamental advantage of a public company is that it may raise capital on a big scale without having to go to the banking system or reduce debt, whereas private companies must raise all of their capital from current members, shareholders, and promoters. When a private company turns public, the risk is borne by the shareholders as well. After their stocks are listed on a stock market website, public companies receive indirect promotion and support.

Minimum Requirements for Converting Private Limited Company Into A Public Limited Company

• Minimum 3 directors
• Minimum 7 shareholders
• DSC of 1 director
• DIN of all directors
• Minimum authorized share capital of Rs.5 Lakhs
• Minimum paid up share capital of Rs.5 lakhs.
• Director & shareholder can be the same person.

Documents Required In Converting Private Limited Company into a Public Limited Company

• Passport size photograph of all directors
• PAN card copy of all the directors
• Copy of Aadhar card/Voter id card
• Copy of property papers (if owned)
• Copy of rent agreement (if rented)
• NOC from the landlord
• Registered office address proof (electricity bill or water bill)

Procedure Of Converting Private Limited Company Into A Public Limited Company

Calling of board meeting

As per provision of section 173(3) of the companies act 2013, issue a notice to hold a meeting with the board of directors to discuss about the conversion of private limited company into a public limited company. The main agenda of this board meeting is mentioned below:
1 Passing of board resolution after getting principal approval from the director to convert private limited company into a public limited company by altering articles of association (AOA).

2 Fixing the date, time & place of extra ordinary general meeting (EGM) to pass a special resolution after getting approval from shareholders to convert private company into a public company.

3 Approving of EGM notice with agenda and explanatory statement.

4.Authorizing the director or company secretary to issue EGM notice after getting the board approval.

Holding extra ordinary general meeting

Extra ordinary general meeting (EGM) is held to pass a special resolution and to get shareholder’s approval for converting private limited company into a public company along with AOA alteration under section 14.

ROC form filing

Few E- forms are filed with ROC at different stages to alter articles of association and for converting private company into a public company.:
1) E form MGT.14 – This form is used to file special resolution with ROC passed to convert private company into a public company.

2) E-form INC-27 – This is an Application to convert private limited company into a public limited company

Scrutiny of documents by registrar of companies

After receiving all the documents to convert private company into a public company, ROC will satisfy himself by doing verification of all the documents. If found satisfied, ROC will close the previous registration & issues a new certificate of incorporation.

Benefits of Converting Private Company Into Public Company

• The first benefit public limited company offers is inflow of public investment by issuing shares to general public.
• By conversion into public company, you can easily raise capital from the general public.
• Public limited companies enjoy better market status and gives confidence to the stakeholders.
• Shareholders investing in a public company expect a better return on the investments

Documents required for Conversion to Public Company

• Copy of PAN Card of Directors
• Passport size photograph of Directors
• Copy of Aadhaar Card/ Voter identity card
• Copy of Rent agreement(If rented property)
• Electricity/ Water bill (Business Place)
• Copy of Property papers (If owned property)
• Landlord NOC (Format will be provided)

Frequently Asked Questions (FAQ’s)

How many Persons are required to incorporate a public limited company?

A Public Limited Company must have a minimum of three Directors and seven shareholders.

What are the requirements to be a Director?

The director needs to be at least 18 years of age. Any individual can become the member of the Public limited company including foreigners/NRI.

Do I have to be present in person to incorporate a Public Limited Company?

No, you do not have to be present at our office or appear at any office for the registration of a Public Limited Company. All the documents can be scanned and sent through email to our office. Some documents will also have to be couriered to our office.

What are the Statutory Compliances Required for a Limited Company?

A limited company must hold a Board Meeting at least once in every 3 months. In addition to the Board Meetings, an Annual General Meeting must be conducted by the Limited Company, at least once every year.

Can NRIs/Foreign Nationals be a Director in Public Limited Company?

Yes, a NRI or Foreign National can be a Director in a Public Limited Company after obtaining Director Identification Number. However, at least one Director on the Board of Directors must be a Resident of India.

What is the difference between Public Limited Company and Private Limited Company?

A Public Limited Company is a Company that is listed on the recognized stock exchange and the securities of a Public Limited Company are Traded publicly. A Private Limited Company is not listed on the stock exchange and the securities are held by the members privately.

What are FDI Guidelines for foreigners in a Limited Company?

100% Foreign Direct Investment is allowed in India in many of the industries under the Automatic Route. Under the Automatic Route, only a post-investment filing is necessary with the RBI indicating the nature of investment made. There are a few industries that require prior approval from the RBI, in such cases, approval must first be obtained from RBI prior to investment.

What is the validity of the registration of a Public limited company?

A registration certificate issued by the registrar of the business is valid until you are meeting applicable rules & compliance.

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