Convert a private limited company into public limited company
Although private entity is a corporate entity and enjoys the benefit of registered corporate but conversion of a private entity into public concern has its reasons, significance and vary accordingly.
Benefits of converting private company into public company:
- Public company is the only corporate form which enjoys inflow of public investments by issuing shares to general public.
- Public company raises capital from general public and makes itself delicious.
- Shareholders investing in public company expect something in return of their investment more like 'give and take' school of thought.
- Public limited company enjoys better market recognition and bestows confidence in the stakeholders.
Procedure for Conversion of Private Limited Company into private limited company
- Board Meeting to take director's approval for conversion.
- General Meeting to take member's approval.
- Filing of prescribed forms with ROC.
- Issuance of fresh certificate by ROC.
Requirements for Conversion
There are certain provisions/conditions needs to be fulfilled during conversion of proprietorship into private.
They are as follows:
- Adopt new Articles of Association (AOA) and Memorandum of Association (MOA) after conversion.
- Minimum share capital of the public company will become Rs. 5, 00,000/-
- Minimum number of directors will become 3 in case of public company.
- Both the directors of private company will be allotted DIN.
- A minimum number of shareholders will be 7 in a case of public company.
Time taken for conversion is 15-20 days, and it also depends on documents provided by applicant and speed of approval by the government.