Convert Private Limited Company to Public Limited
When it come to expansion of company every private limited company looks for conversion from private limited company to Public limited, even though private limited company enjoy all the benefits of public limited company in India, but when it comes to raising an capital then private limited cannot issue debentures and shares to public to raise capital.
Overview
Overview of Private Limited Company
A private limited company that is privately held by small business where the liability of members is extent to their number of share they hold. The Shares of private Limited company cannot be traded publically.
Overview of Public Limited Company
The Company which is listed in stock exchange for trading and anyone can buy their shares publically it is also called publically held company. Companies Act 2013 defines the public limited company offers shares to public either by stock-market or by issuing IPO’s.
Documents Checklist
Documents Required for conversion from Private Limited Company to Public Limited Company
1. Self Attested copy of the directors’ PAN card
2. Passport size photographs of directors
3. Self Attested copy of Aadhar card or voter ID
4. Copy of the rental agreement
5. Electricity or water bill (Business place)
6. The copy of property papers, if it is owned
7. Landlord NOC (No Objection Certificate
Procedure for Incorporation
- Fill the application and Submit to our executive with proper Documents and Make payment.
- Company Name Approval within 3 working days.
- Making Digital Signature certificate for director 1 working days.
- Documents preparing for incorporation within 2 days.
- Applying for company incorporation 8 days.
- Congratulation your Nidhi Company has been incorporated.
Benefits
Benefits of conversion from Private Limited Company to public limited company
The main motive of establishing Nidhi Company is to encourage member to save so that they can fulfill their own financial requirement which arises them time to time. So that they become self-sufficient and can fulfill all future expenses that may come up. And other benefits of registering are mentioned below.
There are several more advantages to forming a Nidhi company. Few of them are mentioned below:
A. Easy Shares Transfer
The Shareholder in public limited company can easily transfer and trade there shares easily. All they shareholder needs to do is file the form for transfer of shares and handover the share certificate to buyer. The transfer of shares in other entity becomes terrible.
B. Fund Raising
The Public limited company has leverage to raise fund by issuing shares to general public which becomes easy for companies to raise funds for their business expansion. All Public Limited Company can issue fixed deposits, debentures and convertible debentures to general public.
C. Limited Liability.
Limited liability in public limited company remains the same.
D. Accept Deposits
Companies At 2013, Section 76, states that Public Limited Company can accept deposits from public.
Procedure of conversion from Private Limited Company to Public Limited Company
Procedure of conversion from Private limited company to Private Limited Company as per companies Act 2013 is mentioned below for better Understanding.
A. Issuing notice to directors for Board meeting.
A Notice should be issued to Board of Directors of Private limited company for Meeting before 7 Days of meeting, the Notice should contain the agenda that need to be discussed in meeting.
- To pass resolution for conversion of Private Limited company to Public limited company.
- Fixing venue for shareholder’s meeting (EGM) Extraordinary General meeting.
- Approval of Notice for calling (EGM) Extraordinary General meeting & Authorization to Directors/Company Secretary similarly issuance of notice.
B. Holding of Board meeting and discussing agenda given in the Notice.
In Board meeting the Directors of Private Limited company Must approve the following below given.
- Approve the conversation from Private Limited Company to Public Limited Company
- Finalizing the list of creditors of Private Limited Company
- Approving the Draft of AOA (Article of Association)
- Approving the draft of MOA (Memorandum of Association)
- Fixing venue for shareholder’s meeting (EGM) Extraordinary General meeting.
C. Issuance of Notice to Director for Holding General meeting.
The Notice to directors for holding general meeting should be send before 21 days.
Not less than 95% of members are allowed for voting to call for shorter period of notice given in writing off or by electronic mode.
D. Conduct general meeting
A Special Resolution to be passed in meeting for conversion of private limited company to public limited company in EGM.
E. MGT-14 filing.
MGT-14 is to be filled with registrar of companies within 30 days of Special Resolution passed.
Following are the Attachments in form MGT-14.
- Copy of Explanatory Statement
- Copy of Notice of EGM
- Certified true copy of special resolution passed in EGM
- Copy of AOA Amended
- Copy of MOA Amended
- Copy of If EGM held at shorter notice, consent of shorter notice.
F. INC-27 Form Filing.
INC-27 Form should be filled within 15 day of special resolution passed.
Following are the Attachments in form INC-27.
- Copy of Explanatory Statement
- Copy of Notice of EGM
- Certified true copy of special resolution passed in EGM
- Copy of AOA Amended
- Copy of MOA Amended
- Copy of If EGM held at shorter notice, consent of shorter notice.
G. Approval of MGT-14 Form & INC-27 Form.
The Registrar of companies will approve the form fMGT-14 And INC-27, if they feel that private Limited company fulfill the required Norms of as per companies Act 2013.
H. Certification of Incorporation of Public Limited Company.
Once The Registrar the satisfied by form filled, then registrar will approve the form and will send the Incorporation certification of Public Limited company and shall cancel the previous Private limited company Registration.
Process
Get the process done in 5 Easy Steps
FAQ's
Answer: Yes, It is compulsory to change the name of company during conversion of Pvt Ltd to Public Limited Company, Suffix from “Private Limited” To “Limited” Since it shows the entity has been change from private Limited to Public limited company.
Answer: No. There is No restriction on remuneration on managerial remuneration Like Private Limited Company.
Answer: 3 Directors are compulsory to form Public Limited Company.
Answer: The Minimum required for conversion are mentioned below,
- DSC for at least one director
- Minimum 7 shareholders
- DIN for all directors
- Minimum 3 directors, and both Director and Shareholder can be the same person.
Answer: Any Organization or Individual Including NRI, foreigners are eligible to become member in Public Limited Company.
Answer: The Public Limited can issue shares, debentures and accept public deposits from general public to raise funds for expansion of business.
Answer: No. There is no need to take new GST registration, since Modification in previous GST is possible.
Answer: Section 2 (68) (71), section 3, Section 149, Section 13 with Rule 29 of Amendment Rules 2020, Section 14 with rule 33 Amendment Rules 2020 Governs the process of conversion of private limited company to public limited company.
Answer: It takes 20 to 25 days to get company approved.
Answer: The following are the steps involved during conversion process.
- Issue Notice for Holding Board Meeting
- Hold Board Meeting
- Send Notice for Holding EGM
- Convene EGM
- File MGT-14
- File INC- 27
- Approval of MGT- 14 and INC- 27
- Certificate of Incorporation.
Answer: The Directors appointed by shareholder to operate day to day business activities in Public Limited Company.
Answer: Shareholder is owner of Public Limited Company.
Answer: INC-27 And MGT-14 to be filled for conversion of Pvt Ltd Company to Limited company.
