CONVERT A PRIVATE TO PUBLIC LIMITED COMPANY

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CONVERT A PRIVATE TO PUBLIC LIMITED COMPANY

A fairly straightforward process, but do remember that you need three directors, seven shareholders and a paid-up capital of at least Rs. 5 lakh.

PRIVATE TO PUBLIC LIMITED COMPANY

It's great news that you're looking to go public. The process to convert from private to public limited company is simple, but will take 30 to 35 days to complete, as there are many steps involved. First you need to alter the articles of association, then delete the word private from your name, commence the registration process and finally wait for the certificate of commencement of business. Do note, however, that some requirements and charges will depend on whether or not you already have three directors, seven members (shareholders) and a paid-up capital of Rs. 5 lakh (all are necessary for a public limited company).

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Advantage

Quick Share Transfer

Shareholders of a public limited company can transfer their shares with great ease. All they need to do is file the share transfer form and hand over the share certificate to the buyer. The process of transfering your share in other business structures is hugely tedious.

Raise Capital

The big advantage of the public limited structure is that you can leverage it to raise capital from the general public through shares. This would, however, require listing on a stock exchange. All public limited companies can issue fixed deposits, debentures, convertible debentures to the general public.

Greater Credibility

Public limited companies need to disclose their audited statement of accounts, inform the regulatory bodies of any structural change and hold annual general body meetings for all shareholders. It's tedious but these compliances bring a public limited company a great deal of credibility to the organisation.