Conversion of a private company into a public company

How does a private company become a public company?

The company passes a special resolution. The articles are rewritten so that the company is no longer a private company under section 2(68).

Three limits come out of the articles. The restriction on transfer of shares comes out. The limit of 200 members comes out. The bar on inviting the public to subscribe for shares comes out.

The company must have at least seven members and three directors. The word “Private” comes off the name. The Registrar issues a fresh certificate of incorporation.

Conversion does not list the shares on a stock exchange. Listing is a later, separate process.

Who should convert into a public company?

Two plans fit this conversion:

• A company that will offer shares to the public.
• A company that needs more than 200 members.

A company that will raise money from a small set of investors can stay a private limited company.

Which documents does INC-27 need?

INC-27 is filed with four attachments.

• The altered memorandum and articles
• The minutes of the general meeting
• A certified copy of the special resolution
• The list of members, showing at least seven

What are the conversion steps?

Company Suggestion files the conversion in five steps.

1. The board approves the conversion and calls a general meeting. Notice is at least 21 clear days, unless holders of 95 percent of the shares entitled to vote agree to shorter notice.
2. The members increase the count to at least seven, and the directors to at least three, if the company is short.
3. The general meeting passes a special resolution and adopts the new memorandum and articles.
4. MGT-14 files the resolution within 30 days.
5. INC-27 is filed. The Registrar issues a fresh certificate as a public company.

Related page: Private limited company registration

Frequently asked questions

4 questions cover the rules that decide this registration.