Conversion of a Private Company into a Public Company
Public limited companies are better suited for expansion as capital can be raised easily. On the contrary, private limited companies are better for small businesses. As small businesses grow bigger, a need is faced to raise more capital to not miss out on opportunities. Public companies raise the required capital through the issue of shares. Also, these shares are traded in the share market which provides scope for further expansion. As per the Companies Act 2013, a private limited company can be changed to public limited by amending the Articles of Association and the Memorandum of Association. By availing legal services of Corporate Consult, the transition from public limited to private limited takes without hindrance.
Conversion of Private Limited to Public Limited
Corporate Consult is a team of CAs, Senior Advocates, and other experienced professionals who provide corporate legal services. Our team provides the best in class and swift services to meet the needs of our clients. The conversion of a company from private to public may seem full of difficulties but with the necessary experience and knowledge, our clients can plan ahead while we handle all the legal work.
- The first task is to meet the legal requirements of forming a public limited company. These are mentioned in the Companies Act 2013. After applying for the conversion, our experts will verify the necessary details.
- The next step is the amendment of MOA and AOA. Memorandum of Association mentions the details of Directors and other important details. Comparatively, more directors are required in a public limited company. Article of Association relates to the internal machinery of the company.
- A new company PAN card will also be needed. As every company is a legal person, it has to pay tax on its income and thus, needs a PAN card.
- The last step is to pay the registration fees for the conversion. The fee has to be paid to the Registrar, along with the necessary documents.
Procedure for Conversion of Private Limited Company to Public Limited Company
We provide an easy procedure for the conversion. Our job is to simplify the legal work for our clients and meet their expectations. Through the following series of steps, a private limited company could be converted to a public limited:
- First and foremost, interested clients have to simple our form to avail of the service. The form requires basic details regarding the company, its registration, and so forth.
- Since certain requirements have to be met before a public company can be incorporated, our experts will verify and check the mentioned details. If all the requirements mentioned in the Companies Act 2013 are met, the process is taken further.
- Our experts will then alter and amend the AOA and MOA of the client’s company. It is necessary to add and remove certain information and details from these documents. The documents will be drafted thoroughly and they will be made in the required legal format.
- After making the necessary changes, the documents are submitted to the Registrar of Companies. The required fee is submitted and the approval is awaited.
- As soon as the company is incorporated as a public limited company, the digital signature certificates and other necessary documents are forwarded to the clients.
The whole process takes up to 40 days. All the work is done on time and the clients are updated regularly.
Documents required for Conversion to Public Company
For the process to be completed, certain documents will be needed. The legal documents are meant to verify and certify the identity of the company. These include:
- Copy of PAN card of the Directors.
- Copy of Aadhar Card of other valid identity proof of the Directors.
- Recent bills of electricity or water for address confirmation.
- Passport size photographs of the Directors.
- Papers related to property owned by the company; etc.
These are some of the documents that will be required during the process. All the required documents will be taken at once and our clients will not be vexed during the process. Other documents such as DIN of every director will be needed. The minimum paid-up capital of the newly incorporated public company should be 5 lakhs. If the capital requirement is not met, the private company cannot be converted into a public company.
Frequently Asked Questions
A minimum number of 3 directors and 7 shareholders are needed to form a public limited company.
Unlike a private limited company, shareholders are free to sell their shares to the public. The shares of the company can be traded in the share market.
Our experts execute the services expeditiously. The process usually takes up to a maximum of 40 days.