Conversion of a Private Limited Company into Public Limited Company - Overview

In the Indian Corporate Sector, a Private company enjoys every benefit which is available to a Public Company. However, when it plans to expand its business operation, it cannot issue debentures and shares to the public to raise capital. Therefore, the Conversion of Private Limited to Public Limited opens new opportunities, mainly in the form of market reach and fundraising.

Benefits of Conversion of Private Limited into Public Limited

Listing of Shares-
Through conversion of private limited to public limited company, the entity can list its shares in a recognised stock exchange.
Raise Capital
All public limited companies can issue debentures, fixed deposits, and convertible debentures to the general public.
Easy Share Transfer
By going for the process of conversion of private limited to public limited company, the shares can be easily transferred from one shareholder to another shareholder.
Greater Reliability
Public limited companies requires to inform the regulatory bodies of any structural change, disclose their audited statement of accounts, and hold annual general body meetings for all the shareholders. These compliance procedures bring an immense deal of credibility to the entity.
Easy Acceptance Of Deposits
As per the subject to Section 76 of Companies Act 2013, the rules Public Companies can accept deposits from public.

Issue Notice for Holding Board Meeting

In the BM, the directors of the company must approve the following items:
1 . To approve the Conversion of Private Company to Public Company;
2. Finalise the list of Creditors;
3. Approve the draft of MOA (Memorandum of Association);
4. Approve the draft of AOA (Article of Association);
5.Fix time, date, and venue for holding EGM (Extraordinary General Meeting)
Send Notice for Holding EGM
The directors need to send a notice for the EGM at least twenty-one days before the date of the EGM.
Convene EGM
A Special Resolution (SR) for authorising the conversion of private company to public company should be passed in the EGM. Shareholders also need to approve the draft of the new AOA and MOA in the meeting.
File MGT-14
After passing the SR, Directors need to file form MGT- 14 with the Registrar of Companies (ROC) within thirty days from the date of the EGM.

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