Conversion Of Private Company Into Public Company

Conversion of Private Company into a Public Company

Text of the provisions of Section 14(1) of Companies act,2013

Subject to the provisions of this Act and the conditions contained in its memorandum, if any, a company may, by a special resolution, alter its articles including alterations having the effect of conversion of—

  • a private company into a public company;

Provided that where a company being a private company alters its articles in such a manner that they no longer include the restrictions and limitations which are required to be included in the articles of a private company under this Act, the company shall, as from the date of such alteration, cease to be a private company

MAIN POINTS TO BE CONSIDERED:

  • Members of the Company shall approve the conversion of Company into Public Company by Special Resolution.
  • Name clause of Memorandum needs to be amended to exclude the word 'Private'.
  • If the Company has less than 7 members, appropriate steps should be taken to increase them to at least 7.
  • If the number of directors of the Company is two, the number of directors should be increased to at least 3.
  • Increase the authorized share capital and paid up share capital as prescribed for public company, if required. Presently, minimum capital is not prescribed. 
  • The Articles of the Company shall be suitably amended for the removal of restrictive provisions applicable to a Private Company. It is advisable to adopt a new set of Articles applicable to a Public Company.
  • Company has not defaulted in filing of Annual Returns or Financial Statement or any other document due for filing with the Registrar. 
  • Company has not defaulted in repayment of matured deposits or debentures or interest on deposits or debenture.

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