Home / Private Limited Company to Public Limited Company

Updated on : 22-Jan-2020   05:40 AM IST | 4 min read

Public Limited Company Definition

A public company has 7 or more members and enjoys the benefit of raising capital by inviting general public to subscribe to its shares whereas private company limits number of members to 200 and cannot invite general public to subscribe to its shares.

A public company enjoys many benefits as compared to private limited company such as raising reserves at a large scale, reducing debt etc. In case of private limited company, all reserves are raised by the existing members, shareholders and promoters and risk is also shared between the shareholders.

What Is Included In Our Package?

Eligibility Consultation

Document Preparation

Application Drafting

Government Fees

Minimum Requirements For Converting Private Limited Company Into A Public Limited Company

  • Minimum 3 directors
  • Minimum 7 shareholders
  • DSC of 1 director
  • DIN of all directors
  • Minimum authorized share capital of Rs.5 Lakhs
  • Minimum paid up share capital of Rs.5 lakhs.
  • Director & shareholder can be the same person.

Documents Required In Converting Private Limited Company Into A Public Limited Company

  • Passport size photograph of all directors
  • PAN card copy of all the directors
  • Copy of Aadhar card/Voter id card
  • Copy of property papers (if owned)
  • Copy of rent agreement (if rented)
  • NOC from the landlord
  • Registered office address proof (electricity bill or water bill)

Procedure Of Converting Private Limited Company Into A Public Limited Company

  • Calling of board meeting – As per provision of section 173(3) of the companies act 2013, issue a notice to hold a meeting with the board of directors to discuss about the conversion of private limited company into a public limited company. The main agenda of this board meeting is mentioned below –
    1. Passing of board resolution after getting principal approval from the director to convert private limited company into a public limited company by altering articles of association (AOA).
    2. Fixing the date, time & place of extra ordinary general meeting (EGM) to pass a special resolution after getting approval from shareholders to convert private company into a public company.
    3. Approving of EGM notice with agenda and explanatory statement.
    4. Authorizing the director or company secretary to issue EGM notice after getting the board approval.
  • Issue of EGM notice – As per the provision of section 101 of the company’s act, EGM notice is issued to all members, directors and auditors of the company.
  • Holding extra ordinary general meeting – Extra ordinary general meeting (EGM) is held to pass a special resolution and to get shareholder’s approval for converting private limited company into a public company along with AOA alteration under section 14.
  • ROC form filing – Few E- forms are filed with ROC at different stages to alter articles of association and for converting private company into a public company.
    1. E form MGT.14 – This form is used to file special resolution with ROC passed to convert private company into a public company.
    2. E-form INC-27 – This is an Application to convert private limited company into a public limited company
  • Scrutiny of documents by registrar of companies – After receiving all the documents to convert private company into a public company, ROC will satisfy himself by doing verification of all the documents. If found satisfied, ROC will close the previous registration & issues a new certificate of incorporation.

Benefits Of Converting Private Company Into Public Company

  • The first benefit public limited company offers is inflow of public investment by issuing shares to general public.
  • By conversion into public company, you can easily raise capital from the general public.
  • Public limited companies enjoy better market status and gives confidence to the stakeholders.
  • Shareholders investing in a public company expect a better return on the investments.

FAQ’S on Converting Private Limited Company Into A Public Limited Company

Yes, it is mandatory to have at least 3 directors in a public limited company.
Any individual/organization can become a member of a public limited company. Foreigner nationals/NRI’s can also become a member of public limited company.
No, there is no additional fee you have to pay during the process of conversion.
No, it is 100% online process. Therefore, there is no need of you to be physically present during the conversion process.
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