Affluence Advisory
Quick Summary
I. Introduction The Companies Act, 2013 provides a detailed process for the conversion of a Private Limited Company into a Public Limited Company and vice versa. Such conversions are typically done to access broader markets, invite public investments, or to benefit from the more flexible structure
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FAQ :
A private company might convert to a public company to raise capital from the general public, gain enhanced credibility, or list its shares on stock exchanges.
The process involves convening a board meeting, altering the Memorandum and Articles of Association, passing a special resolution, filing Form MGT-14 with the ROC, ensuring the minimum number of directors, filing Form INC-27 for conversion, and finally receiving a fresh Certificate of Incorporation.
Converting a public company to a private one is more stringent and requires obtaining approval from the National Company Law Tribunal (NCLT) in addition to the Registrar of Companies (ROC).
For private to public conversion, restrictions on share transfer and member numbers are removed. For public to private conversion, restrictions on share transfer, prohibitions on public invitations for shares, and a limit on the number of shareholders (to 200) are introduced.
Form MGT-14 is used to notify the ROC about special resolutions and alterations to MOA/AOA. Form INC-27 is used for the application of conversion (private to public or public to private), and Form INC-28 is filed with the ROC after NCLT approval for public to private conversions.
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