Conversion of Private Ltd to Public
What is Conversion of Private Limited to Public Limited?
Whenever private companies plan to expand and require more capital resources, they would convert themselves into public companies. By becoming public companies they can issue shares or debentures to the public and get the required amount of capital.
What are the advantages for conversion of Private Limited to Public Limited?
The main advantage of forming a public limited company is that the shares of the company may be listed on the Stock Exchange. This allows the company to raise capital by selling shares to the public, while existing shareholders can buy and sell shares easily.
What are the disadvantages for conversion of Private Limited to Public Limited?
Disadvantages of a company can be expensive to establish, maintain and wind up. the reporting requirements can be complex. ... if directors fail to meet their legal obligations, they may be held personally liable for the company's debts
What are the reasons for conversion of Private Limited to Public Limited?
The conversion of private limited company is generally done due to the following reasons:
• Recognition, and
• Ease of raising funds.
Documents Required for Conversion of Private Ltd to Public
Process Involved
Step 1
Call Board Meeting
Step 2
Issue of EGM Notice
Step 3
Holding of Extra Ordinary General Meeting on due date and pass the necessary Special Resolution, to get shareholders’ approval for Conversion of Private Company into a Public company along with alteration in articles of association under section 14 for such conversion.
Step 4
File form MGT-14 for filing special resolution passed for conversion of Private Limited in to a public limited with ROC with mandatory attachment i.e altered MOA/AOA
Step 5
File form INC-27
Step 6
New Pan Card Allotted
FAQ'S
- iS Filing of Special Resolution with ROC compulsory?
- File Form No. 23 within 30 days of passing of the resolution along with the Attachment Special Resolution and the Explanatory Statement
- how to File of Prospectus or Statement in lieu of prospectus?
- File Form 62 with the RoC along with the Attachment Prospectus or Statement in lieu of prospectus (SLP) Letter of Application to the Registrar for fresh Certificate of Incorporation Consent letter of the Auditor for inclusion of his name in the SLP
- what is the Key Requirements for the number of shareholders?
- Minimum 7 Shareholders are required
- what is a 'PUBLIC COMPANY'?
- A company that has issued securities through an initial public offering (IPO) and is traded on at least one stock exchange or in the over the counter market. Although a small percentage of shares may be initially "floated" to the public, the act of becoming a public company allows the market to determine the value of the entire company through daily trading.
- what is the meaning of BREAKING DOWN 'PUBLIC COMPANY'?
- Once a company goes public, it has to answer to its shareholders. For example, certain corporate structure changes and amendments must be brought up for shareholder vote. Shareholders can also vote with their dollars by bidding up the company to a premium valuation or selling it to a level below its intrinsic value. Public companies must meet stringent reporting requirements set out by the Securities and Exchange Commission (SEC), including the public disclosure of financial statements and annual 10-k reports discussing the state of the company. Each stock exchange also has specific financial and reporting guidelines that govern whether a stock is allowed to be listed for trading.
- What is the meaning of BREAKING DOWN 'PRIVATE COMPANY'?
- Private companies may issue stock and have shareholders. However, their shares do not trade on public exchanges and are not issued through an initial public offering. In general, the shares of these businesses are less liquid and the values are difficult to determine.
