In spite of the fact that there are thousands of pvt ltd company out there, every private company wishes to become public at some point in the future as it helps them grow their business. It is possible for a company to go public through an initial public offering (IPO) by offering its shares to the general public.
- A private limited company’s shares can now be transferred after an initial public offering.
- Unlike private companies, public limited companies have no limit on the number of members, so they are able to secure funding and gain easy access to it. This is why switching from private to public is ideally motivated by growth and flexibility.
In the process of converting a private limited company to a public limited company
A company seeking to convert private to public limited company will need to follow the following procedures (under the Companies Act, 2013 and the Companies (Incorporation) Rules, 2014):
A Board Meeting Agenda should be sent to each member’s registered address at least seven days prior to the meeting date. These issues should be addressed at the Board Meeting by sending the following notice to the member’s registered address: – The approval of shareholders regarding –
- An amendment or adoption of the Memorandum of Association (MOA).
- New articles of association (AOA) or amendments to existing articles of association (AOA).
- Companies that are private limited are converted into public limited companies.
The notice of an EGM must be circulated by a person who has been authorised to hold the EGM.
It is necessary to set a specific time, date, and location for the EGM.
In accordance with Section 149(1)(a) of the Companies Act 2013, public limited companies must have no fewer than three directors. The following information should be included in the EGM notice:
As soon as possible after the Board Meeting, the Company Secretary/Director may circulate a notice of the EGM:
The notice period for an EGM is 21 days, but it can be shortened under certain conditions: – Obtain the concurrence of 95% of the members who will have the right to vote at the meeting.
At the EGM, shareholders will approve resolutions electronically.
Filing of the form with RoC:
Following the EGM, the Registrar of Companies must be informed about the resolutions and the form filing process must be completed within the stipulated time period.
a)E-Form MGT – 14:
A completed MCA form and the following attachments should be submitted with the RoC as soon as respectively approved resolutions have been passed.
- Please find attached the notice and explanation of the EGM as required by Section 102 of the Act.
- – Certified copy of the resolutions passed during the EGM and the new Memorandum of Agreement.
- The AOA has been updated.
b)E-Form INC – 27:
In addition to the form, the following documents must be included with the application for conversion of a private limited company to a public limited company:
- The meeting minutes.
- The new AOA is attached.
- New MOA copy.
- As a result of the EGM, the following resolutions were passed.
- Members of the company and their details
- All directors must possess Digital Signature Certificates (DSCs).
- The director identification number (DIN).
- Providing proof of identity is a requirement for all directors.
- All directors must provide proof of address.
- Each director should have a passport-sized photograph.
- A proof of business address can be found here:
- Documents pertaining to property ownership.
- Renting a property involves the following:
- A certificate of no objection has been signed by the owner.
- Arrangement for Rent
- It is highly recommended that you provide a recent utility bill.
- Statements of financial position certified by the company.
- A receipt acknowledging the filing of the latest income tax return.