In the era of current business cycle, to run a business on wide platform it is required to form an organization which can protect the interest of governing board as well as stakeholders. As we all know that the most popular form of business entity now a day is a “Company” whether it is a Private or Public.
To form and run a private company is quite simple than the Public. But simultaneously there are certain privileges which only given to the public companies.
Some time at the initial stage investor form a private company as per Companies Act and later on when there are many opportunities to expand the business via multiple ways they convert it into Public to get that privileges viz., to increase the number of members more than 200, for the purpose of accepting money from public, no restriction on transfer of shares etc…
Therefore, growth and flexibility are ideally the reasons for the switch from private to public.
Stepwise process for conversion of Private Limited Company to Public Limited Company
Step 1
Conduct a Board Meeting to pass Board Resolution for the approval of Notice of General Meeting, Conversion and for the alteration of MOA and AOA
Step 2
Conduct General Meeting and pass Special Resolution for the Conversion, Alteration in MOA and AOA and for the name change of company (delete word “Private”)
Step 3
File an E-Form MGT-14 within 30 days from the passing of Special Resolution with following attachments:
1. Notice of General Meeting along with copy of Special Resolution
2. Altered MOA
3. Altered AOA
(Note: As per section 117 (1) of the Companies Act, 2013 copy of every resolution which has the effect of altering the articles shall be embodied in or annexed to every copy of the articles issued after passing of the resolution)
Step 4
File an E-Form INC-27 for conversion of Private to Public Company within 15 days from passing of Special Resolution with following attachments:
1. Notice of General Meeting along with copy of Special Resolution
2. Altered MOA
3. Altered AOA
4. Details of Director Promoter and Subscribers
5. Minutes of the General Meeting
After the approval of both the above forms the CIN number of Company will be change by substituting word “PTC” to “PLC”.
Post Conversion Requirements:
1. A Fresh PAN card has to be applied for
2. All Business letterheads and related stationery should be updated with the company’s new name
3. The bank account details of the company to be updated
4. Intimation to concerned authorities to be given
5. Printing of copies of New MOA and AOA
The article has been prepared considering the relevant Guidelines/ Circulars/ Notifications/ Provisions of the Companies Act, 2013, the rules made there under Readers are requested to cross-cw5heck the provisions before acting upon the same. The author will not be liable for any damages or penalties caused.
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In the case of conversion of private company into public company shall we conduct creditor meeting/take consent for conversion/ Noc from creditor/Notice to creditor for conversion. if yes any draft of such requirement.