Private To Public Company Conversion
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Conversion Of Private Ltd. Company To Private Ltd. Company
Public limited Company is the only corporate form of organization which is allowed to raise funds from general public. Public Limited Company enjoys better avenues for borrowing of funds. It can issue debentures, secured as well as unsecured, accept deposits from the public, etc. Banking and financial institutions prefer to render large financial assistance to Public Limited Companies. Even a closely held Company can operate as a Public Company without diluting promoters’ stake and moreover Public Limited Companies as compared to other business forms enjoys better recognition in the market and bestows confidence in the stakeholders.
A private company may, at any time, pass a special resolution deleting from its articles the- three compulsory restrictions as to membership, transfer of shares and public subscription, and then from the date of alteration it becomes a public-company
Upon becoming a public company, the company will have to increase the number of its members to at least seven and -that of its directors to at least three, if already their number was fewer than the aforesaid statutory minimum required in that connection for a public company. Further the word ‘Private’ will be deleted from the name of the company.
Advantages of Public Limited Company
To increase the shareholding patterns of the Company
As the public company has no any restriction on its Article of Association. So it can have any number of members.
It attracts talents and skilled peoples which ensures better management in the organization.
Greater Capital Infusion
Due the more number of members investment in the Company increases.
Listing of shares by Public issue
Due to restriction in its AOA, Private Company cant go for the Listing but a Public company can go for the Initial Public offer.
Easy availability of Fund
Due to the limited number of private Company there is flexibility in the operations of business funds can be limited but in case of Public company fund will be available easily.
Public limited company enjoys better market recognition and bestows confidence in the stakeholders.
|Convert your Private Limited Company Into Public Limited Company @Just Rs 11,999/- (All inclusive)|
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Procedure For Conversion
Conducting the Borad Meeting(1-3 Working Day)
- The Board meeting of the company will be conducted to approve the resolution. Call the Extra Ordinary General Meeting (EGM) for passing the special resolution
Holding Extra Ordinary General Meeting(2-5 Working Day)
- Hold the Extra-ordinary General meeting (EGM). Pass the necessary Special Resolution, for Conversion of Private Company into Public Limited Company
Filling of Forms & Approvals(1-2 Working Day)
- Alteration of MOA and AOA and filing of the requisite forms will be done with the ROC for the conversion. On being satisfied that Company has complied with prescribed requirements the Registrar shall issue the Certificate to the effect of Conversion of Private Company into Public Limited Company
Frequently Asked Questions
What is a Public Limited Company?
A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager of such a Company can at times be unlimited. The minimum number of shareholders is 7.
What are the advantages of a Limited Company?
A limited company has following advantages:
- Members’ (the directors and shareholders) financial liability is limited to the amount of money they have paid for shares.
- The management structure is clearly defined, which makes it easy to appoint, retire or remove directors.
- If extra capital is needed, it can be raised by selling more shares privately.
- It is simple to admit more members.
What is the Memorandum of Association (MOA) and the Articles of Association (AOA) of a company and what is the procedure in their regard?
On receipt of the name approval letter from the ROC the MOA and the AOA are required to be drafted. The MOA states the main, ancillary / subsidiary and other objects of the proposed company. The AOA contains the rules and procedures for the routine conduct of the proposed company. It also states the authorized share capital of the proposed company and the names of its first / permanent directors. After the MOA and AOA are required to be stamped.
Why choose Public Limited Company?
- Liability is limited to the face value of the shares
- Shares are transferable with ease
- Accept deposits from public
- Listing shares on stock exchange
Is it possible for foreign nationals to register a Public Limited Company in India?
Yes, foreign direct investment is allowed in India only in limited companies.
How is the certificate of incorporation issued?
After all the documents are filed, the ROC calls the attorney on a specific date for scrutiny and making the corrections in the MOA and AOA filed. On complying with the same, the certificate of incorporation is granted to the attorney.