Private Limited Companies enjoy relaxations and exemptions that Public Limited Companies, bound by stringent statutory guidelines, do not. This conversion is chiefly pursued to access those relaxations from the Ministry of Corporate Affairs, and makes it easier to exercise control over the company post-conversion.
Procedure for Conversion
- 1
Convene Board Meeting
The board considers the conversion proposal and seeks approval to amend the MoA and AoA, fixing a date for the General Meeting. Notice must be sent to members at least 21 days ahead.
- 2
Convene General Meeting
The conversion resolution and MoA/AoA amendments are approved by special resolution, with the auditor present.
- 3
Filing of Application
Within 30 days of the special resolution, file Form MGT-14 with certified copies of the altered MoA/AoA, the resolution, and the meeting notice with explanatory statement.
- 4
Filing of e-Form RD-1
Within 60 days of the resolution, file Form RD-1 with the Regional Director, attaching the proposed MoA/AoA, meeting minutes, board resolution, and creditor/debenture-holder list. Respond to any RD queries within 15 days via Form RD-5.
- 5
Advertising the Application
Advertise the application in Form INC-25A, in both a vernacular newspaper local to the registered office and a widely circulated English newspaper.
- 6
Filing With the RoC
Once the Regional Director approves and issues the conversion order, file it in Form INC-28 with the RoC within 30 days.
- 7
New Certificate of Incorporation
Once all compliances are met, the RoC issues a new certificate re-incorporating the company as a Private Limited Company.
Frequently Asked Questions
What is a Public Limited Company?
A limited liability company with freely transferable shares, able to raise funds from the public and list on a stock exchange, with no cap on shareholders.
What is a Private Limited Company?
A limited liability entity with up to 200 shareholders and restricted share transferability, usually preferred by families or groups that don't want outside shareholders.
What are the benefits of this conversion?
Relief from the strict compliance and regulation Public Limited Companies face, plus greater ease of management.
How soon must Form RD-1 be filed with the Regional Director?
Within 60 days of passing the conversion resolution in the General Meeting.
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