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. Legal Provisions related to Conversion of Private Company into Public Company are given in Section 18 and 14 of the Companies Act, 2013 read with Rule 33 of Companies (Incorporation) Rules, 2014. The Companies Act, 2013 provides for converting a Public Company to a Private Company by altering the MOA and AOA of the company under section 14. These clauses are:
1) Transfer-ability of shares.
2) Membership of the company.
3) Public Subscription of shares.
1) First of all, the shares become freely transferable.
2) Its borrowing power also becomes more in comparison to a private company.
3) There is ease of raising more capital because a company can issue more shares.
4) There is no limit to number of members.
5) Most importantly, the company can freely accept deposits from the public.
6) It also enjoys more credibility than a private company.
1) Calling of board meeting
2) Issue of EGM Notice
3) Holding of Extra Ordinary General Meeting
4) ROC Form Filling
a) E-form MGT 14
b) E-form INC 27
1) Notice of EGM along with copy of explanatory statement under section 102;
2) Certified True copy of Special Resolution;
3) Altered memorandum of association;
4) Altered Articles of association
5) Certified True copy of Board Resolution may be attached as an optional attachment.
6) It is mandatory to attach Minutes of the members meeting where approval was given for conversion and altered articles of association.
7) Certified True copy of Board Resolution may be attached as an optional attachment.
8) Other information if any can be provided as an optional attachment(s)
1) Fee for Converting Private Limited to Public Limited Company
The government fee starts from Rs. 200 and the professional fee starts from Rs. 10000.
2) Timeline for Converting Private Limited to Public Limited Company
The entire process takes around 30-35 days. However, this will be true only if everything goes smoothly. This means that the actual time may be more or even less and depends on the time it takes to complete various procedures.