Overview of Conversion of Private Limited Company to Public Limited Company Services

Converting a private limited company to a public limited company is a big step towards developing the firm and getting more financing. A public limited company can issue public shares, which allows it to raise capital from a large number of investors. However, this process necessitates compliance with a number of legal and regulatory criteria, such as getting shareholder and Registrar of Companies (ROC) approval and amending the Memorandum and Articles of Association. Seeking professional advice from specialists like StartupFino for private limited company to a public limited company services to ensure a seamless and effective conversion of a private firm into a public one.

Benefits of Converting a Private Limited Company to a Public Limited Company

Given below are some key benefits of Converting a Private Limited Company to a Public Limited Company:

Efficient Share Transfer

Public limited companies allow shareholders to transfer their shares more efficiently. The process involves filing a share transfer form and handing over the share certificate to the buyer. This easy procedure simplifies the share transfer process compared to private limited companies, which often have more restrictions and complexities in transferring shares.

Capital Generation

One of the significant advantages of becoming a public limited company is the ability to raise capital from the general public through issuing shares. Public limited companies can access the capital market by listing on stock exchanges. This allows them to attract investments from a broader investor base and fund expansion, research, development and other business initiatives.

Freely Transferable Shares

Shares of public limited companies are freely transferable, subject to regulations outlined in the SEBI Act and Companies Act. This facilitates liquidity and allows shareholders to easily buy and sell their ownership interests in the company.

Acceptance of Deposits

Public limited companies, subject to Section 76 of the Companies Act 2013, have the ability to accept deposits from the public.

Documents Required for Conversion of Private Limited Company to Public Limited Company

Converting a private limited company to a public limited company involves various legal formalities and documentation. Given below is a list of essential documents that are required for the conversion process:

1. PAN Card and Identification Documents:

• PAN card copies of shareholders and directors
• Valid passport for foreign nationals
• Voter ID, driving licence or passport of shareholders and directors

2. Address Proof:

Electricity bill, telephone bill or latest bank account statement as address proof for shareholders and directors

3. Passport-Size Photographs:

Latest passport-size photographs of shareholders and directors

4. Business Residence Proof:

Telephone bill or electricity bill of the registered office address

5. No Objection Certificate (NOC) from Landlord:

NOC obtained from the owner(s) of the certified office space

6. Rent Lease Agreement:

If applicable, the rent lease agreement of the certified office premises

7. Income Tax Return (ITR):

Copy of the income tax return filed for the previous fiscal year

8. Notarised Documents for NRI or Foreign National Directors:

If directors are Non-Resident Indians (NRIs) or foreign nationals, their documents must be notarised

9. Financial Statements:

Duly attested copy of the latest audited financial statements of the company

10. Incorporation Certificates:

Copies of the Declaration of Incorporation, Memorandum of Association (MoA) and Articles of Association (AoA)

Procedure for Conversion of Private Limited Company to Public Limited Company

Given below is the procedure for Converting a Private Limited Company to a Public Limited Company:

1. Notice for Calling Board Meeting:

• Issue a notice to convene a board meeting of directors.
• Agenda for the board meeting should include discussions related to conversion and calling an Extraordinary General Meeting (EGM) of shareholders.

2. Board Meeting:

• During the board meeting:
• Approve the conversion of the company to public limited, subject to shareholder approval.
• Discuss and adopt a new set of Memorandum of Association (MOA) and Articles of Association (AOA), subject to shareholder approval.
• Fix the date, time and venue for the EGM.

3. Notice for General Meeting:

• Issue a notice to all shareholders at least 21 days before the EGM.
• Consent for shorter notice may be obtained if at least 95% of the shareholders allow it.
• Ensure compliance with notice periods as specified in the Articles of Association.

4. Conduct EGM:

• Conduct the Extraordinary General Meeting for the following purposes:
• Pass a special resolution for the conversion of the company from private to public.
• Approve the amended MOA and AOA.

5. File Form MGT-14:

• File Form MGT-14 with the Registrar of Companies (ROC) within 30 days of passing the special resolution.
• Attachments to Form MGT-14:
• Explanatory statement.
• Notice of EGM.
• Certified true copy of the special resolution.
• Amended MOA and AOA.
• Consent of shorter notice (if applicable).

6. File Form INC-27:

• File Form INC-27with the ROC within 15 daysof passing the special resolution.
• Attachments to Form INC-27:
• Certified true copy of the special resolution.
• Amended MOA and AOA.
• Consent of shorter notice (if applicable).
• Minutes of the EGM.

7. Approval of Forms MGT-14 and INC-27:

• The ROC will review and approve the filed forms if the requirements of conversion are met.

8. Certificate of Incorporation:

• Once the forms MGT-14 and INC-27 are approved by the ROC, a fresh Certificate of Incorporation will be issued.
• The former registration of the private limited company will be cancelled and the company will officially become a public limited company.

Why Hire Startupfino for Converting your Private Limited Company to Public Limited Company Services?

Conversion of Private Limited Company to Public Limited Company Servicesassists businesses in restructuring their structure, accepting public deposits, meeting their strategic goals and focusing better on their core competencies.

StartupFino’s expert services on converting Private Limited Company to Public Limited Company work hand in hand with your professional team to refine your financial plan in order to maximise shareholder value while meeting your growth and profit goals.