Know about Conversion of a Private Limited Company into Public Limited Company

When a Private Company is converted into a Public Company, it opens up new opportunities, especially in terms of fundraising and market reach. The company can raise funds through a public issue and accept deposits, making this structure suitable for medium and large-scale businesses. The conversion process requires approval from the government and changes to the company's Memorandum and Articles of Association. In addition, a minimum of 7 members and 3 directors are required for the conversion from Private to Public Limited. The company's rights, liabilities, powers, and obligations remain unchanged even after the conversion. The transfer of shares becomes possible as the restriction on transfer is removed during the conversion process.

Benefits of Conversion of Private Limited into Public Limited

Raising capital through public issue of shares

One of the significant advantages of a public limited company is its capacity to generate funds by issuing shares. This becomes even more beneficial if the company is listed on a recognized stock exchange, as it can attract investors like hedge funds and mutual funds. In comparison to a private limited company, a public limited company has the potential to raise a significantly larger amount of capital.

Brand Awareness

When a company becomes publicly listed on the stock exchange, it gains exposure to a wider audience and increased brand recognition, which can lead to more business opportunities.

Limited liability

The limitation of liability for each shareholder or member remains unchanged after the conversion. Their liability is restricted to the amount of their shareholding, and their personal assets are not jeopardized.

Transferability of shares

Documents Required for Conversion of Private Company to Public Company

PAN Card

PAN Card of shareholders and Directors. Foreign nationals must provide a valid a passport.

Identity Proof

Voter ID/ Passport/ Driving License of Shareholders and Directors

Address Proof

Telephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors

Photograph

Latest Passport size photograph of Shareholders and Directors

Business Address Proof

Electricity Bill/ Telephone Bill of the registered office address

NOC from owner

No Objection Certificate to be obtained from the owner(s) of registered office

Rent Agreement

Rent Agreement of the registered office should be provided, if any

Note

In case of NRI or Foreign National, documents of director(s) must be notarized or apostilled

Incorporation documents

Certificate of Incorporation, MoA & AoA to be provided

Financial Statements

Duly certified copy of latest audited Financial Statements

Income Tax Return

ITR filed for the previous financial year to be submitted

Convert Private limited to Public Company in 3 Easy Steps

1. Answer Quick Questions

Fill in our questionnaires that take less than 10 minutes
Provide basic details & documents required for registration
Make payment through secured payment gateways

2. Experts are Here to Help

Assigning a dedicated Relationship Manager
Procurement of Digital Signatures (DSC)
Alteration of MoA & AoA
Documents drafting including incorporation documents
Certificate of Incorporation
Application for change in PAN & TAN

3. Your private company is converted to Public limited

All it takes is 20 – 25 working days*

_{*Subject to Government processing time}

Process of conversion into Public Company

Day 1-2

Consultancy and assistance for conversion
Collection of basic information & documents
Application of DSC of new director

Day 3– 7

Drafting of necessary resolutions
Drafting of other required documents & affidavit
Alteration of MoA & AoA
Provide documents required drafted after signature

Day 8 – 15

Online filing of form for alteration of MoA & AoA
Government processing time to approve the application

Day 16 – 20 onwards

Online filing of form applicable for conversion
Government processing time to approve the application*

	Private Limited Company	One Person Company	Limited Liability Partnership	Partnership Firm	Proprietorship Firm
Act	Companies Act, 2013	Companies Act, 2013	Limited Liability Partnership Act, 2008	Indian Partnership Act, 1932	No specified Act
Registration Requirement	Mandatory	Mandatory	Mandatory	Optional	No
	Registration under the Act is mandatory to set up business as Private Limited Company	Registration under the Act is mandatory to set up business as One Person Company	Registration under the Act is mandatory to set up business as Limited Liability Partnership	Both registered and unregistered partnerships are legal, but registered entity is preferred	There is no registration criteria prescribed. But registration to establish legal identity is recommended
Number of members	2 – 200	Only 1	2 – Unlimited	2 – 50	Only 1
	Requires minimum 2 and not more than 200 shareholders	Only an individual being Indian resident can be the shareholder	No bar to maximum number of partners, but minimum 2 Designated Partners are required	It is formed with minimum 2 partners, but not exceeding 50	The proprietor is the only owner of the firm
Separate Legal Entity	Yes	Yes	Yes	No	No
	Private Company is separate entity and can own assets in its name	OPC is separate entity and can own assets in its name	LLP is separate entity from partners and can own assets in its name	Partnership firm does not have any separate identity from its partners	Proprietor and the business are same and not different
Liability Protection	Limited	Limited	Limited	Unlimited	Unlimited
	Liability of members is limited to the extent of unpaid value of shares subscribed	Liability of member is limited to the extent of unpaid value of shares subscribed	Liability of partners is limited to the capital amount agreed to introduce	Partners are jointly and severally liable to pay the debts of the Partnership Firm	Proprietor’s liability is to pay-off all debts and obligation of firm
Statutory Audit	Mandatory	Mandatory	Dependent	Not mandatory	Not mandatory
	Auditor must be appointed within 30 days of incorporation	Auditor must be appointed within 30 days of incorporation	Applicable when turnover exceeds INR 40 Lakh or contribution exceeds INR 25 Lakh	Statutory audit not applicable. Tax audit may be applicable based on turnover	Statutory audit not applicable. Tax audit may be applicable based on turnover
Ownership Transferability	Restricted	No	Yes	No	No
	Shares can be transferred with consent to other Shareholders	Shares are not transferable easily	Ownership can be changed with consent of other partners	Ownership is not transferable easily, clause of partnership deed should be referred	Firm in no different from proprietor and so ownership is not transferable
Uninterrupted Existence	Yes	Yes	Yes	No	No
	Change in members or director does not affect the existence of Private Company	Change in members or director does not affect the existence of OPC. The nominee will take place of member	Change in Partners or Designated Partners does not affect the existence of LLP	Change in partner leads to dissolution or formation of another partnership firm	Death or insolvency of proprietor directly affects the firm
Foreign Participation	Allowed	Not Allowed	Allowed	Not Allowed	Not Allowed
	Foreign national are allowed to invest under the Automatic Route	Member, nominee and director must be Indian resident	Foreign nationals are allowed to subject to FDI Guidelines	Foreign nationals are not allowed to be a partner	Foreign Nationals cannot commence proprietorship business
Tax Rates	Moderate	Moderate	High	High	Low
	Tax rate applicable for small companies is reduced to 25%	Tax rate applicable for small companies is reduced to 25%	With tax rate of 30% on business profit, tax benefits to partners is high	With tax rate of 30% on business profit, tax benefits to partners is high	Tax rates of individual applied to Proprietorship Firm
Statutory Compliances	High	Moderate	Moderate	Less	Less
	Apart from Annual filings, it has to comply with various provision laid down, but less compared to public company	Apart from Annual filing, compliance are less compared to Private Company	Annual filing and few event based filings are necessary	Separate ITR of partnership is filed, else there are no filing requirement	No compliances and no requirement to file separate ITR

Explore Private to Public company conversion

Frequently Asked Questions

The primary requirement to incorporate a public limited company is that it requires minimum 7 shareholders and 3 directors. The minimum Authorised Capital of the company is prescribed to ₹ 5 Lakhs instead of ₹ 1 Lakh in case of Private Company.

The suffix “Private Limited” will be replaced with “Limited.” For this change, the company has to seek permission from the shareholders and after that make the required changes in the MoA to get it amended.

Since the Public limited company deals with the public’s money, it requires taking measures which increase the statutory compliance on its part. The regulatory liabilities are not restricted to the income tax but with ROC/MCA, SEBI, RBI, etc. It is important to take extra measures as the stakes are pretty high than any other company.

Once the name approval letter is received from the ROC, the MoA and AoA are required to be drafted. The name clause and capital clause are altered along with the removal of restriction to Private Company as provided by definition.

The company can start its business operations as a Public Company on receipt of the fresh Certificate of Incorporation from RoC.

ProTax Solutions can help you convert your Private limited into a Public Limited Company within 20-25 working days. The time taken for conversion will depend on the submission of relevant documents by the client and speed of Government Approvals. To ensure speedy conversion, one should ensure that all the required documents are submitted.

One Person Company Registration