Private to Public Limited Company
The process of converting from Private to Public Company is a methodical yet simple process. Usually, conversion from Private to Public Company is done when the public, i.e. more than 200 people are invited to subscribe to its shares. The Companies Act, 2013 provides the provision to convert a Private into a Public Company by altering the MOA and AOA of the company.
Why convert to Public Company?
- Quick share transfer
- Possible to raise capital from general public through shares
- Greater credibility
Advantages of Public Limited Company
Quick Share Transfer
Shareholders can transfer their shares easily when compared to the process in other business structures. The shareholders need to only file the share transfer form and hand over the share certificate to the buyer.
Raise Capital
A Public Limited Company can encourage from the general public to raise capital through shares. This however, requires listing on a stock exchange.
Greater Credibility
A Public Limited Company needs to mandatorily (kindly cross-check) disclose their audited statement of accounts, hold annual general body meetings for all of its shareholders and inform the regulatory bodies of any structural changes, from time to time. All these are tedious processes, but these are what makes a Public Limited Company credible to the organization (OR, public?).
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