Converting a private limited company into a public limited company is a strategic move to expand business operations and raise capital from the public. A public company can issue shares to a wide investor base, making it easier to secure funding.

The process involves legal and regulatory compliance, including shareholder approval, modifications to the Memorandum and Articles of Association, and approval from the Registrar of Companies (ROC).

Professional assistance is recommended to ensure a smooth and compliant conversion process.

What is a Private Limited Company and a Public Limited Company?

Here’s a quick comparison to understand the key differences between the two:

Private Limited Company

A privately held company, ideal for small to medium businesses.

• Members’ liability is limited to their shareholding.
• Shares cannot be traded publicly.
• Ownership stays within a restricted group of investors.

Public Limited Company

A publicly traded company whose shares can be bought by anyone.

• Listed on a stock exchange or offered via Initial Public Offerings (IPOs).
• Defined under the Companies Act, 2013, as an entity with limited liability and the ability to raise capital from the public.
• More regulatory compliance but greater fundraising potential.

Benefits of a Public Limited Company

1. Easy Share Transfer
   Shares can be transferred with minimal effort—simply file a transfer form and hand over the share certificate. Compared to other business types, this process is much more streamlined.
2. Capital Raising Power
   Public limited companies can raise funds from the public by issuing shares, subject to stock exchange listing. They can also offer fixed deposits, debentures, and convertible debentures to attract investors.
3. Enhanced Credibility
   Due to strict compliance—like publishing audited financials, informing authorities of major changes, and holding AGMs—public limited companies enjoy greater transparency and trust, boosting investor confidence.

Requirements for Converting a Private Limited Company to a Public Limited Company

• DSC and DIN: Digital Signature Certificate and Director Identification Number for at least two directors.
• MOA & AOA: Revised Memorandum and Articles of Association as per public company norms.
• PAN & TAN: Valid Permanent Account Number and TAN for tax compliance.
• Name Reservation: Apply for a unique company name and get it reserved through the MCA portal.
• CIN: Possession of a valid Certificate of Incorporation for the existing private company.

Private Limited Company Vs Public Limited Company

• Ownership
  Private Limited Company: Owned by a small group (up to 200 shareholders)
  Public Limited Company: Owned by the public; unlimited shareholders
• Share Transferability
  Private: Restricted, requires approval
  Public: Freely transferable, tradable on stock exchange
• Minimum Shareholders
  Private: 2
  Public: 7
• Minimum Directors
  Private: 2
  Public: 3
• Minimum Capital Requirement
  Private: No minimum requirement
  Public: ₹5 lakhs paid-up capital
• Stock Exchange Listing
  Private: Not allowed
  Public: Can be listed on stock exchanges
• Raising Capital
  Private: From private investors only
  Public: From public through shares, IPOs, debentures
• Compliance
  Private: Fewer compliance obligations
  Public: High compliance under Companies Act & SEBI
• Annual General Meeting (AGM)
  Private: Not always mandatory
  Public: Compulsory every year
• Credibility
  Private: Suitable for startups and SMEs
  Public: Higher transparency, trusted by investors

Post-Conversion Requirements

• Apply for a new PAN card in the name of the public limited company.
• Update all business letterheads, invoices, and stationery with the new company name.
• Modify bank account details to reflect the change in company status and name.
• Notify the tax authorities and other regulatory bodies about the conversion.
• Print and maintain updated copies of the revised MOA and AOA.

Procedure for Conversion of Private Company into Public Company

1. Board Meeting
   • Call a Board Meeting as per Section 173(3) of the Companies Act, 2013.
   • Pass a Board Resolution for:
     • Approving conversion from private to public company.
     • Altering the Articles of Association (AOA).
     • Fixing date/time for an Extraordinary General Meeting (EGM).
     • Approving EGM notice and agenda.
     • Increasing number of directors (minimum 3, if not already).
     • Authorizing a Director/Company Secretary to issue the EGM notice.
2. Issue EGM Notice
   • Send EGM notices to all shareholders, directors, and auditors as per Section 101 of the Act.
3. Hold EGM
   • Conduct the EGM on the scheduled date.
   • Pass a Special Resolution for:
     • Conversion to Public Limited Company.
     • Alteration of the AOA under Section 14.
4. ROC Filing
   • File necessary e-forms with the Registrar of Companies (ROC):
     • MGT-14: File within 30 days of passing the special resolution (for AOA alteration).
     • INC-27: Application for conversion of company type with applicable fee.
5. Verification and Approval
   • ROC will verify compliance under Section 18 and Rule 33 of the Companies (Incorporation) Rules, 2014.
   • If satisfied, the ROC will:
     • Close the earlier registration of the private company.
     • Issue a fresh Certificate of Incorporation as a Public Limited Company.

Note:
Conversion does not impact the company’s existing contracts, liabilities, or obligations—they continue as is under the new public structure.

Documents Needed for Conversion of Private Limited Company Into Public Limited Company

• Copy of Directors’ PAN Cards
• Passport-size photographs of all directors
• Copy of Aadhaar Card or Voter ID (as ID proof)
• Rental agreement of the registered office (if rented)
• Recent electricity or water bill of the business premises
• Copy of property ownership documents (if the premises is owned)
• No Objection Certificate (NOC) from the property owner (landlord)

Why Choose Sperso Filings?

Expert Legal Assistance

At Sperso Filings, we support hundreds of businesses every month with accurate legal filings and regulatory compliance—powered by our tech-driven processes and professional legal team.

Clarity & Realistic Expectations

We handle all the paperwork and coordination with authorities, ensuring a smooth experience. Our experts guide you with clear timelines and process transparency.

Trusted & Experienced Team

With a team of seasoned business advisors and legal professionals, Sperso Filings offers dependable support just a phone call away—for startups, SMEs, and growing enterprises.