Conversion of Private Company into Public Company

Q: Can a Public Company carry multiple businesses under one name?

Yes, a [Public Company](public-limited-company-registration) can carry multiple related business activities if it is mentioned in the company’s objects and been approved by the registrar. You can not operate entirely different activities like construction and food company under one name.

Overview

Introduction of Conversion of Private Company into Public Company

In order to diversify the business on large scale it is better to convert private limited company to Public Limited Company. The main benefit of Public Company is that it is easy to raise funds on a large scale basis without approaching banking system and thereby reducing debts while in case of Private Limited Companies all the reserves are raised through the existing members or shareholders and promoters as it is managed privately. Though the chances of risk increase when a Private company goes public among its shareholders. If Public companies once raise funds through IPO, get an indirect promotion and the support through the stock exchange websites where their stocks are listed.

Legal Window has a team of experts providing you the best assistance, timely delivery and guaranteeing the highest customer satisfaction with respect to Company formation and conversion process. You may get in touch with our team on 072407-51000 or email [email protected] for Conversation of Private Limited company to Public Limited Company.

Advantages

Advantages of Conversion of Private Company into Public Company

Medium for preferred Investments

While investing, an investor prefers dealing widely in the market and hence it opens doors for the Public Limited Company to attract more funds from the market as their shares are freely transferable.

Limited Liability

The liability of the Members is limited to the extent of Capital invested by them in the Company and therefore, they cannot be held personally liable for it also it is a legal entity which means it is different from its Members and Directors.

Listing on stock exchange

A Public Limited Company can get itself registered on stock exchange by complying with certain norms which increase the scope of diversification of business and widening the shareholder base and also increasing the risk.

Easy to make acquisitions

Public Limited Companies are more approachable and also have many other advantages like liquidity which makes them attractive for the potential investors at the time of Merger and Acquisitions and it has a greater borrowing capacity.

Details

Minimum Requirements for Conversion of Private Company into Public Company

Minimum three persons as Director and maximum fifteen

Minimum one Director shall be Indian resident

Minimum seven persons as Members

No Minimum Capital requirement

Digital Signatures of any one Director

DIN for all the directors

Documents

Documents Required for Conversion of Private Company into Public Company

Checklist

AOA of the company
List of Shareholders and directors
MOA of the company

How it works

Process of Conversion of Pvt Ltd. Company to Public Ltd. Company

1

Complete the Application Form

You are requested to first fill the simple questionnaire provided by our expert team.

2

Document Processing

At the second step we will be drafting the documents as required to conduct the Board Meetings and General Meetings in accordance with the questionnaire filled by you. The documents will be sent to you for signing.

3

Filing of Forms

After the conduct of the meetings, minutes of the meeting will be drafted and relevant forms MGT-14 and INC-27 will be filed with Ministry of Corporate Affairs.

4

Get Certificate of Incorporation

Once the Registrar approves the conversion, it will issue a Fresh Certificate of Incorporation.

Details

Key Insights on Conversion of Pvt Ltd. Company to Public Ltd. Company

A public company can convert itself into a private company by altering the memorandum and articles of association and by passing special resolution by the company in the Extra Ordinary General Meeting.

The name of the company shall be amended and the word "Private" shall be excluded.

The company needs to maintain the minimum criteria of minimum 3 directors and 7 members.

The company should not have defaulted in filing of Annual Returns and Financials Statements and not defaulted in repayment of debentures or matured deposits.

After the process of conversion, the new name of the company shall be printed on all the stationaries, outside the office building, and inform all the authorities like Banks, Income Tax Departments, Utility Service Providers, and any other authorities.

Questions

FAQs on Private Limited to Public Limited Company Conversion

Minimum three Directors and Seven Members agreeing to subscribe the shares of the Company.

Yes, the above person can become a Director post obtaining Director Identification Number. However, one Director should be Indian Resident.

Yes, for Indian nationals becoming a Director in a Company it is mandatory to have a PAN Card and Passport in case of Foreign Nationals.

It is the documentary proof evidencing that the Company has been registered and having its unique identification number as Corporate Identification Number.

During every financial year, the company must hold at least 4 board meetings (one in each quarter) and one Annual General Meeting (AGM) and EOGM if required. Further, the company has to get the financial statements audited by an independent auditor. Subsequently, it shall file forms like AOC – 4 and MGT – 7, MGT-14 and other forms as applicable as part of Annual Compliance within given time.

The forms that are required to be filed are MGT-14 and INC-27 with Registrar of Companies.

Yes, a Director can also become a shareholder and vice versa as a Company is a Separate Legal Entity.

There is absolutely no minimum capital required but generally people prefer and are advised to incorporate the same with a minimum capital of Rs. 5 lakhs.

As per Companies Act, 2013 it is compulsory to have an individual as an Auditor of a Company. The first Auditor shall be appointed within 30 days from the date of Incorporation by the Board of Directors.

Yes, a Public Company can carry multiple related business activities if it is mentioned in the company’s objects and been approved by the registrar. You can not operate entirely different activities like construction and food company under one name.

You can only transfer the shares by complying with the regulations of Companies Act, 2013 and it is necessary for the public company to get the shares dematerialised with NSDL/CDSL before transferring the shares or before inducing the capital in the company.