Introduction
Expanding Horizons, Enhancing Credibility, Attracting Investment
A Private Limited Company may convert itself into a Public Limited Company under the provisions of the Companies Act, 2013, in order to access a broader investor base, raise capital, enhance credibility, and unlock business expansion opportunities.
This conversion involves removing restrictions applicable to private companies, altering constitutional documents, and filing necessary applications with the Registrar of Companies (ROC).
Legal Framework
Section: 14 and 18 of the Companies Act, 2013
Rules: Companies (Incorporation) Rules, 2014
Authority: Registrar of Companies (ROC)
Why Convert to a Public Company?
Access to Capital Markets
Eligible to raise capital via IPO or private placement
Wider Reach & Brand Trust
Enhanced public credibility and visibility
Business Expansion
Suitable structure for scaling operations
Investor Preference
Attractive to institutional and angel investors
No Shareholding Limit
Removes restriction on number of shareholders
Before applying for conversion, ensure:
- Minimum paid-up capital as required (no specific limit under the Act, but may be required by other laws/SEBI if IPO is planned).
- Minimum 3 directors (with at least one Indian resident).
- Increase in the number of members beyond 200 (if applicable.
Remove restrictive clauses from Articles of Association:
- Restriction on share transfer
- Limit on number of members
- Prohibition on public invitations to subscribe to shares
Step 1: Board Meeting
Approve proposal for conversion
Approve alteration of MOA and AOA
Fix date, time, and venue for Extra-Ordinary General Meeting (EGM)
Approve draft notice of EGM with explanatory statement
Step 2: Conduct EGM
Pass Special Resolution for:
Alteration of Articles of Association
Conversion from Private to Public
Change of name (from “Private Limited” to “Limited”)
File Form MGT-14 with ROC within 30 days of passing the resolution
Step 3: Alter MOA and AOA
Remove private company clauses
Incorporate provisions applicable to a public company
Modify name clause from “Private Limited” to “Limited”
Step 4: File Application for Conversion with ROC
File Form INC-27 along with:
Copy of altered MOA and AOA
Copy of special resolution
Minutes of EGM
Declaration from directors and professionals
List of proposed directors and members
Revised certificate of incorporation (will be issued by ROC)
Form Purpose
- MGT-14 Filing of special resolution
- INC-27 Application for conversion
- DIR-12 (if new directors appointed) Details of directors
- INC-28 (if required) ROC orders (in rare cases)
Once the company becomes public, it must:
- Appoint at least 3 directors, including one woman director
- Maintain proper board structure (as per Section 149)
- Amend PAN, TAN, licenses, and bank records
- Comply with public company provisions under the Companies Act, 2013
- If planning IPO, comply with SEBI (ICDR) Regulations