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Private Limited Company To Public Limited Company


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Online Private Limited Company To Public Limited Company Starts at Rs. 9887.00 / -
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About 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 main advantage of Public Company is that it can raise reserves at a large scale without approaching banking system and reducing debt whereas Private Companies which are privately owned, all the reserves are raised by existing members, shareholders and promoters. If a Private company goes public then the risk is also shared among the shareholders. Public companies once recorded, get indirect promotions and support through stock exchange websites where their stocks are recorded.

Benefits

Raising capital through public issue of shares

The ability to raise shares is the most beneficial factor of a public limited company. Especially, if it is listed on a recognized stock exchange market, it has the ability to attract investors from hedge funds, mutual funds etc. The amount of capital that can be raised is much greater than a private limited company.

Brand Awareness

When the company goes public, it gets listed in the stock exchange and hence automatically more people get to know about and its functions, hence the increased brand recognition will bring more business.

Limited Liability

The liability of each shareholder or member is limited. This characteristic remains intact with this conversion. Their liability is limited to the extent of their shareholding. The individual or personal assets of shareholders or members are not at risk.

Transferability of shares

Shares in a public limited company are easily transferable as compared to the private limited company. The shareholders can sell the shares and benefit from its liquidity. This acts as an incentive for people to invest as they are not bound to remain with the company forever.

Minimum Requirements

  • 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.5lacs
  • Director and shareholder can be the same person
  • Minimum 3 Directors

Documents Required

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)

Process

ROC Form filing

For alteration in Article of Association for conversion of Private Company into a Public company under section 14, few E-forms will be filed with concerned Registrar of Companies at different stages as per the details given below:

  • E-form MGT.14 – For filing special resolution with ROC, passed for conversion of Private Company into a Public company.
  • In case of alteration in Article of Association for conversion of Private Company into a Public Company Special resolution is required to be passed under section 14. Accordingly as per section 117(3)(a), a copy of this special resolution is required to be filed with concerned ROC through filing of form MGT.14 within 30 days of passing special resolution in the EGM.
  • As per Rule 33 of Companies (Incorporation) Rules, 2014, for effecting the conversion of a private company into a public company or vice versa, the application shall be filed in Form No. INC-27 with fee. Accordingly an Application for conversion of a Private company into a Public company is required to be filed in e-Form INC.27 to the ROC concerned, with all the necessary annexures and with prescribed fee.
  • As per Section 18, after receiving the documents for conversion of a Private Company into a Public Company, ROC shall satisfy itself that the Company has complied with the requisite provisions for registration of the company. If so satisfied, ROC (Registrar of Companies)shall close the former registration and issue a fresh certificate of incorporation, after registering the documents submitted for change in class of company.

Frequently Asked Questions

The primary requirement to incorporate a public limited company is that it requires minimum 7 shareholders and 3 directors. The minimum Authorised Capital of the company is prescribed to Rs. 5 Lakhs instead of Rs. 1 Lakh in case of Private Company.

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.

Since the Public limited company deals with the public’s money, it requires taking measures which increase the statutory compliance on its part. The regulatory liabilities are not restricted to the income tax but with ROC/MCA, SEBI, RBI, etc. It is important to take extra measures as the stakes are pretty high than any other 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.

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

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.

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