CONVERSION OF PRIVATE LIMITED TO PUBLIC LIMITED:-
A Public Company has seven or more members and can invite public to subscribe to its shares. A subsidiary company of a Public company is deemed to be a Public company.
A Private company is an organization which limits its number of members to 200 and cannot invite public to subscribe to its shares. The Companies Act, 2013 provides for converting a Public Company to a Private Company by altering the MOA and AOA of the company.
The main advantage of Public Company is that it can raise reserves at a large scale without approaching banking system and reducing debt whereas Private Companies which are privately owned, all the reserves are raised by existing members, shareholders and promoters. If a Private company goes public then the risk is also shared among the shareholders. Public companies once recorded, get indirect promotions and support through stock exchange websites where their stocks are recorded.
DOCUMENTS REQUIRED FOR CONVERSION OF PRIVATE LIMITED TO PUBLIC LIMITED:-
- PAN Card of shareholders and Directors & Foreign nationals must provide a valid a passport.
- Voter ID/ Passport/ Driving License of Shareholders and Directors
- Telephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors
- Latest Passport size photograph of Shareholders and Directors
- Electricity Bill/ Telephone Bill of the registered office address
- No Objection Certificate to be obtained from the owner(s) of registered office
- Rent Agreement of the registered office should be provided, if any
- Certificate of Incorporation, MoA & AoA to be provided
- Duly certified copy of latest audited Financial Statements
- ITR filed for the previous financial year to be submitted
- NOTE:-In case of NRI or Foreign National, documents of director(s) must be notarized or apostilled
Minimum Requirements for Conversion:
- DSC for 3 Directors
- Minimum 7 Shareholders
- DIN for all directors
- Minimum Authorized Share Capital of Rs 5lacs
- Minimum Paid up Share Capital of Rs.5lacs
- Director and shareholder can be the same person
- Minimum 3 Directors