{"id":4489,"date":"2020-03-04T18:20:58","date_gmt":"2020-03-04T12:50:58","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=4489"},"modified":"2021-04-29T15:22:58","modified_gmt":"2021-04-29T09:52:58","slug":"conversion-of-private-company-to-public-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/conversion-of-private-company-to-public-company\/","title":{"rendered":"Conversion of Private Company to Public Company: A Complete Summary"},"content":{"rendered":"\n<p class=\"has-drop-cap\">At the time of the incorporation of a business entity, the applicants are provided with options for selecting their class for Company based on which the Companies Act, 2013 provisions will be applied. To avail the benefits of the other classes, the Companies Act, 2013 allows changing the class post-incorporation from Private Company to Public Company and vice versa. <strong><em>In simple words, Private Company is a closely held Company which put a restriction on transfer of shares through its Articles of Association (AoA). The Companies Act, 2013, prohibits the invitation to the public to subscribe for shares in a Private Company.On the other hand, Public Company does not have any such restrictions regarding an invitation to the public for the subscription of shares or transferability of shares.<\/em><\/strong> Both companies have their benefits and limitations. The applicants sometimes desire to change their class of Company. The procedure followed for the Conversion of Private Company to Public Company will be discussed here. <strong><em>The article discusses the relevant provisions of Companies Act, 2013, for <\/em><\/strong><em><a href=\"https:\/\/corpbiz.io\/conversion-of-private-limited-to-public-limited\"><strong>Conversion of Private Company to Public Company<\/strong><\/a><\/em><strong><em>.<\/em><\/strong><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-private-company-to-public-company\/#What_is_a_Private_Company_and_Public_Company\" >What is a Private Company and Public Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-private-company-to-public-company\/#What_are_the_Key_considerations_for_Conversion_of_Private_Company_to_Public_Company\" >What are the Key considerations for Conversion of Private Company to Public Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-private-company-to-public-company\/#What_is_the_Procedure_for_Conversion_of_Private_Company_to_Public_Company\" >What is the Procedure for Conversion of Private Company to Public Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-private-company-to-public-company\/#What_Documents_are_Required_for_Conversion_of_Private_Company_to_Public_Company\" >What Documents are Required for Conversion of Private Company to Public Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-private-company-to-public-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Private_Company_and_Public_Company\"><\/span>What is a Private Company and Public Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Companies Act, 2013 provides for different types of classes of Companies, of which the most popular in the corporate world are the Private and Public Companies. These are the most preferred and the requisites of the Private and Public Company are as under:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"623\" height=\"316\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-8.png\" alt=\"Private Company and Public Company\" class=\"wp-image-4492\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-8.png 623w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-8-300x152.png 300w\" sizes=\"(max-width: 623px) 100vw, 623px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Private Company<\/h3>\n\n\n\n<p><strong><em>The Section 2(68) of Companies Act, 2013, defines Private Company<\/em><\/strong>. The Articles of Association (AoA) restricts the transferability of shares in the Company and prevent the public at large to subscribe for the shares of the Private Company. This is the main criteria which differentiate the Private Company from Public Company. <\/p>\n\n\n\n<p><strong><em>The maximum number of\nthe members for Private Company is 200<\/em><\/strong> (except in case\nof One Person Company). This maximum number does not include any former\nemployee or present employees. As the Private Company does not transfer the share\nfreely and limited interest of members is involved, the law has granted several\nprivileges and exemptions to Private Company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Public\nCompany<\/h3>\n\n\n\n<p><strong><em>The Section 2(71) of the Companies Act, 2013<\/em><\/strong><sup><a href=\"https:\/\/www.mca.gov.in\/Ministry\/pdf\/CompaniesAct2013.pdf\">[1]<\/a><\/sup><strong><em>, defines a Public Company<\/em><\/strong>. A <a href=\"https:\/\/corpbiz.io\/public-limited-company-registration\"><strong>Public Limited Company<\/strong><\/a> sells all or a portion of itself through an initial public offering. It is not a Private Company where the shares are restricted to be transferred to the public at large. <strong><em>The public Company for expansion can trade-in an open market by selling shares to the public at large to raise capital<\/em><\/strong>. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Key_considerations_for_Conversion_of_Private_Company_to_Public_Company\"><\/span>What are the Key considerations for Conversion of Private Company to Public Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>There\nare specific rules to be followed when the Conversion of Private Company to\nPublic Company is done. The key points of consideration are as follows:<\/em><\/strong><\/p>\n\n\n\n<ul><li>The members of the Company should approve for the Conversion of Private Company to Public Company.<\/li><li>&nbsp;Name clause in the Memorandum of Association (MoA) should be amended to exclude the word Private. <\/li><li>&nbsp;The number of members of the Company is 7 before the Conversion of the Company as prescribed <strong><em>under Section 3(1) of the Companies Act, 2013<\/em><\/strong>.<\/li><li>The number of the director to be increased to 3 as prescribed under <strong><em>Section 149(1) of Companies Act, 2013.<\/em><\/strong><\/li><li>The Company should file all the annual returns or financial statements due for filing with the Registrar of Companies (RoC).<\/li><li>The Company should pay all the matured deposits as prescribed under <strong><em>Rule 29(1) of Companies (Incorporation) Rules, 2014<\/em><\/strong>.<\/li><li>An application should be made to modify Permanent Account Number (PAN) of Company.<\/li><li>Provide information to the Central government, where the Company is registered.<\/li><li>Articles of Association (AoA) should be altered so that they no longer include the restrictions and limitations of a <a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>Private Limited Company<\/strong><\/a>.<\/li><li> The Central Government should also approve the Conversion. <\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/corpbiz.io\/learning\/convert-your-company-into-llp\/\">For Less Compliances and Low-Cost Incorporation; Convert your Company into LLP<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Procedure_for_Conversion_of_Private_Company_to_Public_Company\"><\/span>What is the Procedure for Conversion of Private Company to Public Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The procedure followed for the Conversion of Private Company to Public Company is as follows:<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"597\" height=\"269\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-9.png\" alt=\"Procedure for Conversion of Private Company to Public Company\" class=\"wp-image-4494\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-9.png 597w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-9-300x135.png 300w\" sizes=\"(max-width: 597px) 100vw, 597px\" \/><\/figure><\/div>\n\n\n\n<p> Issue a notice with the agenda of the Board Meeting. The issue of notice should be given to Directors at least 7 days before the Board meeting. The notice should be sent to the registered address of all the Directors. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Calling\nof Board Meeting<\/h3>\n\n\n\n<p><strong><em>The\nBoard Meeting should be held to discuss the following agendas:<\/em><\/strong><\/p>\n\n\n\n<ul><li>To adopt new\nMemorandum of Articles (MoA) subject to the approval of shareholders. <\/li><li>To adopt new\nArticles of Articles (AoA) subject to the approval of shareholders.<\/li><li>To get the\napproval of Conversion of Private Company to Public Company from the\nshareholder.<\/li><li>Fix date, time\nand the place for holding EGM in the Company.<\/li><li>To get approval\nfor EGM and authorize someone to circulate notice of EGM.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Issue\nof EGM Notice<\/h3>\n\n\n\n<p><strong><em>According\nto the provisions of Section 101 of Companies Act, 2013<\/em><\/strong>, the issue of notice of EGM will be given to all\nthe Directors, Members and Auditors of the Company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Hold\nEGM<\/h3>\n\n\n\n<p>The\nshareholder&#8217;s approval for the Conversion of Private Company to Public Company\nwill be taken in the resolution passed by all the shareholders in the Extra-ordinary\nGeneral Meeting (EGM). The notice of EGM should be given not less than 21 days\nbefore the date on which the EGM is to be held. <\/p>\n\n\n\n<p><strong><em>The\nnotice period to shareholders can be shorter if the consent is given in writing\nor through an electronic medium by not less than 95% of the members entitled to\nvote at such meetings<\/em><\/strong>. Also, follow\nthe procedure for prescribed for issuing and signing of notice of EGM. <\/p>\n\n\n\n<p>The\nEGM will be held on the fixed date and resolution will be passed. The resolution\nwill be passed for Conversion of Private Company to Public Company and\nalteration of MoA and AoA. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Form\nFiling to RoC<\/h3>\n\n\n\n<p><strong><em>&nbsp;After passing of the resolution in EGM, it is\nmandatory to file Form MGT-14 within 30 days.<\/em><\/strong> The attachments with the <strong><em>MGT-14 Form<\/em><\/strong> to be\nattached are:<\/p>\n\n\n\n<ul><li>Notice of EGM<\/li><li>Certified Copy\nof the Resolution passed in the EGM<\/li><li>Copy of new MoA\nand AoA<\/li><\/ul>\n\n\n\n<p><strong><em>File\nForm INC-27 within 15 days after passing of the resolution in the EGM.<\/em><\/strong> The following attachments should be attached with\nthe INC-27:<\/p>\n\n\n\n<ul><li>Minutes of the\nMeeting<\/li><li>Copy of Altered\nMoA<\/li><li>Copy of Altered\nAoA<\/li><li>Copy of the\nResolution passed<\/li><li>List of members\nin the Company with all the essential details<\/li><li>Optional\nAttachments if required.<\/li><\/ul>\n\n\n\n<p> After the approval of the <strong><em>Form MGT-14 and INC-27<\/em><\/strong>, the Registrar of Companies (RoC) will issue a new Certificate of Incorporation for the Company with the changed name. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Documents_are_Required_for_Conversion_of_Private_Company_to_Public_Company\"><\/span>What Documents are Required for Conversion of Private Company to Public Company? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The\nprimary documents required for the Conversion of Private Company to Public\nCompany are as follows:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Digital Signature\nCertificate (DSC) of all Directors<\/li><li>Directors\nIdentification Number of all Directors<\/li><li>Permanent\nAccount Number (PAN) Card of all Directors<\/li><li>Passport size\nPhotographs of all Directors<\/li><li>Adhaar Card Copy<\/li><li>Rent Agreement\nCopy (if Rented Property)<\/li><li>Electricity\nBill\/ Water Bill (if Business Place)<\/li><li>Property Papers\nCopy (if Owned Property)<\/li><li> No Objection Certificate (NOC) from Land Lord  <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Companies Act, 2013, provides for Conversion of Private Company to Public Company. By alteration in the Memorandum of Association (MoA) and Articles of Association (AoA), the Conversion can be done of Private Company to Public Company. The procedure of Conversion is time-consuming. We at <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a> have qualified and experienced professionals, to help you with the process of Conversion. Our professionals will plan ideally and will assure the successful completion of your work. &nbsp;<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/corpbiz.io\/learning\/online-opc-convert-private-limited-company\/\">Conversion Process of One-person company to Public or Private Company<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>At the time of the incorporation of a business entity, the applicants are provided with options for selecting their class for Company based on which the Companies Act, 2013 provisions will be applied. To avail the benefits of the other classes, the Companies Act, 2013 allows changing the class post-incorporation from Private Company to Public [&hellip;]<\/p>\n","protected":false},"author":16,"featured_media":4498,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[120,340],"tags":[378],"acf":{"service_id":"321"},"authorName":"Sakshi Sharda","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/sakshi-sharda.jpg","authorDescription":"Sakshi Sharda has done BBALLB(HONS) and holds a strong knowledge on the matters pertaining to finance and law. From the past one year she is working as a legal advisor and in her leisure time she works on improvising her knowledge. Sakshi is spreading her knowledge by writing for Corpbiz.","postViews":69365,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4489"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=4489"}],"version-history":[{"count":16,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4489\/revisions"}],"predecessor-version":[{"id":29508,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4489\/revisions\/29508"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/4498"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=4489"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=4489"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=4489"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}