Convert Public Limited Company to Private Limited Company in India

A Public Limited Company, legally known as PLC, is a publicly held company. It is a limited company whose shares can be traded with the public. PLC can be listed or not listed in the stock exchanges. PLC requires a minimum of 3 Directors as a prerequisite.

A private limited company or famously known as LTD is a privately held company. This implies that the business limits owner liability to its shares and limits number of shareholders to 50. It also restricts shareholders from trading shares publicly.

Advantages of Private Limited Company

• The liability of shareholders is limited to their shares. Financial risks are a part of business but to be able to minimize them and sustain the business progress is imperative. In an LTD, if due to any reason the company were to be closed the shareholders would not risk losing their personal assets.
• Risk of takeovers is minimized when two shareholders trade shares as the selling and buying of shares is possible only when both parties have given their consent.
• Private limited companies are incorporated; hence it continues to exist even if the owner dies.
• LTD is not obliged to disclose its finances to public, unlike the Public Limited.
• It enjoys less legal restrictions as compared to a Public Limited Company.
• There is a necessity to call for a general meeting of members in Public Limited, whereas there is no such compulsion in Private Limited.
• To start a business, the public company needs a certificate of commencement of business after incorporation, whereas a private company can start its business just after receiving a certificate of incorporation.

Eligibility Criteria to Public Limited Company to Private Limited Company in India

Before you’re allowed to Public Limited Company to Private Limited Company, you must fit the following criteria

·         All the directors should consent to decision to convert

·         You have to be prepared to make changes to the Memorandum of Association

·         Your company must have adhered to all the Annual compliance requirements

·         You should have the approval of your creditors before you can go through this conversion.

·         Your company must have repaid all the matured deposits and debentures or interest on such deposits and debentures.

Documents Required for converting a Public Limited Company to a Private Limited Company in India

• E-form MGT 14 – Special resolution for conversion of the company into a public company is to be filed with the following attachments:
• Certified true copy of special resolution
• Altered memorandum and articles of association (MOA/AOA)
• Certified true copy of board resolution is optional
• Notice of Extra Ordinary General Meeting (EGM) that is held to pass the board resolution which is the approval of Directors for conversion of a Public Limited Company to Private Limited Company
• E-from INC 27 – Application for the conversion of Public Limited to Private Limited
• Minutes of the Meeting where approval was given for conversion and altered Articles of Association
• Altered Articles of Association

Process for converting a Public Limited Company to a Private Limited Company in India

·         Organize an extra-ordinary general body meeting inviting your members, shareholders, directors, creditors, suppliers and most of those involves with your public limited company on a continuous basis.

·         Draft a meeting of minutes within 15 days of convening this board meeting

·         Make entry in the Register of members in via the FORM MGT-1 in case you’ve yet to dematerialize your shares.

·         Get the approval – Letter of consent – from the directors so that this conversion can be initiated.

·         Convene a general body meeting and obtain “No objection” from the members of your company and your company’s creditors

·         Make changes to the Memorandum of Association as well as Articles of Association.

·         File the online form MGT-14 via the online MCA portal. Upload the letters of consents and other requisite documents when you do.

·         Advertise to the local and national newspaper about this conversion process within 14 days of submitting MGT-14 form.

·         After your application is approved, public to private limited company conversion will be completed.

Our Assistance to convert your Public Limited Company to a Private Limited Company

We, at Registrationwala, provide end to end solutions for conversion from Public Limited Company to Private Limited Company. Our services include:

·         Helping you organize the meeting

·         Assistance with getting NOC of the creditors

·         Filing the application for conversion.

·         Reviewing the application and making changes if needed

·         Ensuring that your business entity is converted as per your requirement.

Registrationwala.com is a leading legal consultancy firm providing the comprehensive services relating to public limited company to Private limited company.

So, take your first steps towards this conversion and reach out to us.