Conversion of private company limited to public company limited.

Public limited companies are converted from private limited companies What is the working process of a private company?

The term "private company" refers to a business owned by an individual. Although it might have shareholders and issue stock, the company is neither listed on a public exchange or offered publicly. Since public companies are not regulated by the Securities and Exchange Commission (SEC), private companies have no filing requirements. Private companies don't have the same liquidity as public companies, making valuations difficult.

What is the process of becoming a public company?

Shares of a public limited company (PLC) are sold in an initial public offering (IPO). The general public can purchase shares in public companies, unlike private limited companies.

What are the requirements for conversion?

The conversion of a private limited company to a public limited company must meet certain requirements.

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The number of shareholders must be seven DSC with one director KYC for directors with DIN There is no minimum capital requirement Shareholders and directors can both be individuals A minimum of three directors is required

There are several benefits to doing business as a public limited company over a private limited company ● Shares listed Upon becoming a public company, the firm will be able to list its shares on a stock exchange.

This information is needed by a business entity to raise funds. ● Fundraising can be helped by the public

You can raise funds through stock exchanges such as the BSE or NFT. Shares can be used for this purpose in a variety of ways. The shares that your company issues for raising funds can be preference shares, equity shares, or a combination of them. ● Limitation of liability Upon converting from a private limited company to a public limited company, the concept of limited liability is retained. ● Share transfers are free Public limited companies are free to transfer their shares under the SEBI Act and Companies Act. ● Easy acceptance of deposits Public limited companies can accept public deposits according to Section 76 of the Companies Act 2013. ● Increased reputation As a result of converting the private Limited company into a public Limited company, the company's reputation will be enhanced. Stock exchanges allow public companies to list their shares. Listing the company's shares on a public exchange will not only boost the company's reputation, but also its credibility. ● Acceptance of deposits Deposits can be accepted by public companies under section 76 of the Companies Act of 2013.

Private companies becoming public companies: Procedures The following steps can be taken to convert a private limited company into a public limited company:

1) Convocation of a board meeting The agenda items for the Board meeting are listed below. ● Upon signing the new Memorandum of Association (MOA).

● The AOA must be approved by the shareholders (Articles of Association). ● Converting a private limited company into a public one requires the shareholders' approval. ● The following date, time, and location are appropriate for a special general meeting (EGM). ● An extraordinary general meeting can be called by approving a notice of the meeting and requesting approval. ● An extraordinary general meeting is called and a notice is issued. Directors, members and auditors are required to receive notices of EGMs under Section 101 of the Companies Act, 2013.

2) Call a special meeting of the general assembly To convert the company from a private limited company to a public limited company, all shareholders will need to approve a resolution at the EGM. A 21-day notice must be given at least 21 days before an extraordinary general meeting.

Providing a written or electronic consent from not less than 95% of shareholders entitled to vote at these meetings can shorten the notice period. According to the established procedures, notices of extraordinary general meetings should be issued and signed.

In order to establish the extraordinary general meeting, a resolution will be passed on the fixed date. Additionally, the resolution will amend the Memorandum and Agreement and convert the private limited company into a public limited company.

3) Registrar's office filing: Registrars of Companies (RoCs) must be notified within the specified deadline once the resolutions at the EGM are passed.

MGT - 14 - E-Forms: RoC must receive the response within 30 days of the passage of resolutions. The following attachments must be uploaded to the MCA portal with this form:

● A statement explaining the extraordinary general meeting is attached to the notice of the meeting under Section 102 of the Act. ● Certified copies of resolutions adopted at an extraordinary general meeting. ● I have attached the MOA and AOA for the new contract.

The following is the 27th instalment of E-Form INC: It is specifically designed for this conversion. Within 15 days of the extraordinary general meeting, the RoC must be notified of the resolutions. The form must be accompanied by the following documents. ● Minutes of the meeting. ● Our company's members are listed below with their essential details ● MOA and AOA are updated. ● The EGM resolutions are contained in this document.

What are the requirements after conversion? ● You must apply for a new PAN / TAN ● Please update all letterheads and stationery with your new company name ● Your company's bank account details need to be updated. ● It is necessary to have a DSC (Digital Signature Certificate). ● The conversion to a public limited company must be reported to tax authorities and other personnel. ● A print version of the new MOA and AOA should be prepared as soon as possible.

Securities exchange board of India requirements also require listed companies to do more compliance work. It takes a lot of planning to decide whether or not your company should go public.