Private Limited to Public Limited Company
It is possible to convert a company from private limited to public limited under the Companies Act, 2013. But to do so, it is necessary to remove some restrictions from some clauses of the Articles of Association first. These clauses are:
- Transfer-ability of shares.
- Membership of the company.
- Public Subscription of shares.
It can work as a public company as soon as it deletes the above clauses. But this depends on the smooth completion of conversion procedure.
Difference between a Private Limited and Public Limited Company
- A public company needs a minimum of 7 members and a private company needs 2.
- The minimum capital for a public company is Rs. 5, 00,000 but for a private company, it is Rs. 1, 00,000.
- A private company cannot have more than 50 members in any case while a public company has no such limit.
- A private company cannot accept any public deposits.
- The words 'Pvt Ltd or Private Limited' must appear at the end of the name of a private company but a public company only needs to use the word 'limited.
- While a public limited needs to hold a statutory meeting, a private company does not need to do so.
Benefits of a Public Limited Company
- First of all, the shares become freely transferable.
- Its borrowing power also becomes more in comparison to a private company.
- There is ease of raising more capital because a company can issue more shares.
- There is no limit to number of members.
- Most importantly, the company can freely accept deposits from the public.
- It also enjoys more credibility than a private company.
Steps to Convert Private Limited to Public Limited Company
- First, call a board meeting.
- Next, issue a notice for Extra Ordinary General Meeting (EGM).
- Then, hold the EGM.
- Pass a special resolution in the EGM.
- Making a new set of Articles of Association.
- Lastly, file an application with the Registrar of Companies.
Documents for Converting Private Limited to Public Limited Company
Before applying for conversion, please keep the below information and documents ready:
- All details for filling the application form, that is, INC 27.
- Minutes of Extraordinary General Meeting.
- Modified Articles of Association.
Fee for Converting Private Limited to Public Limited Company
The government fee starts from Rs. 200 and the professional fee starts from Rs. 10000.
Timeline for Converting Private Limited to Public Limited Company
The entire process takes around 30-35 days. However, this will be true only if everything goes smoothly. This means that the actual time may be more or even less and depends on the time it takes to complete various procedures.
How PocketLawyer Can Help?
Do you want to convert your company from private limited to public limited? You can find a one-stop hassle free solution at PocketLawyer.
At PocketLawyer, you can post your requirement and get the best price quotation of lawyers/professionals. These professionals are experts in company law and can provide you with their best services at affordable price.
Need any further help? Contact us now.