Convert Private Limited Company to Public Limited Company
A Public Company has seven or more members and can invite public to subscribe to its shares. A subsidiary company of a Public company is deemed to be a Public company.
A Private company is an organization which limits its number of members to 200 and cannot invite public to subscribe to its shares. The Companies Act, 2013 provides for converting a Public Company to a Private Company by altering the MOA and AOA of the company.
The main advantage of Public Company is that it can raise reserves at a large scale without approaching banking system and reducing debt whereas Private Companies which are privately owned, all the reserves are raised by existing members, shareholders and promoters. If a Private company goes public then the risk is also shared among the shareholders. Public companies once recorded, get indirect promotions and support through stock exchange websites where their stocks are recorded.
Our Company Registration package includes the following:
- DSC for one director and DIN for up to three directors
- Drafting of MoA & AoA
- Registration fees and stamp duty
- Company Incorporation Certificate
Conversion of Private Limited Company to Public Limited Company is done through taxfillingindia.
Benefits of Conversion of Private Limited into Public Limited
Raising capital through public issue of shares
The ability to raise shares is the most beneficial factor of a public limited company. Especially, if it is listed on a recognized stock exchange market, it has the ability to attract investors from hedge funds, mutual funds etc. The amount of capital that can be raised is much greater than a private limited company.
When the company goes public, it gets listed in the stock exchange and hence automatically more people get to know about and its functions, hence the increased brand recognition will bring more business.
The liability of each shareholder or member is limited. This characteristic remains intact with this conversion. Their liability is limited to the extent of their shareholding. The individual or personal assets of shareholders or members are not at risk.
Transferability of shares
Shares in a public limited company are easily transferable as compared to the private limited company. The shareholders can sell the shares and benefit from its liquidity. This acts as an incentive for people to invest as they are not bound to remain with the company forever.
Documents Required for Conversion of Private Company to Public Company
- PAN Card of shareholders and Directors. Foreign nationals must provide a valid a passport.
- Voter ID/ Passport/ Driving License of Shareholders and Directors
- Telephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors
- Latest Passport size photograph of Shareholders and Directors
- Electricity Bill/ Telephone Bill of the registered office address
- No Objection Certificate to be obtained from the owner(s) of registered office
- Rent Agreement of the registered office should be provided, if any
- In case of NRI or Foreign National, documents of director(s) must be notarized or apostilled