You can open a new world of possibilities and enjoy a number of advantages by converting your private limited company into a public limited company. You can convert your private to public company by reading on to find out how to do so if you have decided to do so.
Moreover, if you have further questions regarding the process, then our experienced corporate secretaries in Singapore are always available to assist you. We hope the following article will assist you in understanding the process.Moreover, if you have further questions regarding the process, then our experienced corporate secretaries in Singapore are always available to assist you. We hope the following article will assist you in understanding the process.
What Are the Main Characteristics of a Public Limited Company?
Although there are some similarities between a private limited company structure and a public limited company structure, the public limited company structure has a few more features that help make it better suited to large enterprises. These include:
- Shareholders: Public limited companies require at least 50 shareholders, making them ideal for large corporations
- Public: Public limited companies can issue shares when they list, unlike private limited companies
- Regulations: Due to its nature, a company that is in the public domain will have to abide by stricter accounting and reporting regulations
Similarly to the private limited company structure, a public limited company is also required to have a registered office in Singapore, as they will be required to have one in Singapore.
In what ways are private limited companies converted to public limited companies?
Step 1: Engage a lawyer
If you wish to avoid a prospectus, you should have your lawyer draft out a Statement instead.
Step 2: Pass shareholders’ resolution
On the following agenda, Osome Pte. Ltd. will pass a shareholders’ resolution (special resolution) so as to agree on the following matters:On the following agenda, Osome Pte. Ltd. will pass a shareholders’ resolution (special resolution) so as to agree on the following matters:
- Public limited companies are converted from private limited companies
- The name of the company will be changed to Osome Ltd.
- Rather than adopting a prospectus, adopt the Statement
- The adoption of a new set of corporate constitutions (for public limited companies)
Step 3: Lodge shareholders’ resolution
ACRA (Accounting and Corporate Regulatory Authority) must be notified of the passed shareholder resolutions.
Step 4: Notice of incorporation
A notice of incorporation will be issued by ACRA.
Step 5: Lodge another lodgement
If you have lodged another filing (list of shareholders of the company) with the ACRA within 14 days after the notice of incorporation has been mailed to you, you should lodge another filing with the ACRA also.
Who Should Convert Their Private Limited Company to a Public Limited Company?
Advantages
When your private limited company has more than 50 shareholders, it must be converted into a public limited company. There are several benefits to getting listed as a public limited company:
The advantage of converting to a public limited company is you have the opportunity to list your company on the stock exchange. After converting, you will have the opportunity to:
Maximize shareholder value over the long term
As a result of converting private limited companies into public companies, the brand will be able to better demonstrate its brand value in the market and the original shareholders will receive a significant return on investment (ROI).
Liquidity
In contrast, stockholders of a public limited company will have an open niche market where sellers and buyers can interact and do business. Stockholders of a registered pvt ltd company must find investors willing to purchase their shares.
Compensation
It is common practice in Singapore for companies that are publicly listed to give their directors, officers, and employees shares of stock as compensation as a means of enhancing their compensation package. The share price of a security is determined by its market value as determined by the stock exchange.It is common practice in Singapore for companies that are publicly listed to give their directors, officers, and employees shares of stock as compensation as a means of enhancing their compensation package. The share price of a security is determined by its market value as determined by the stock exchange.
Disadvantages
Although converting a private limited company into a public listed company has some advantages, there are also some disadvantages. There are some disadvantages associated with the conversion, including:
- Getting it up and running isn’t cheap
- Increasingly strict accounting and reporting standards are in place
- Due to the inability of the company to control its stock buyers, it is more likely that a competitor will attempt a hostile takeover
- A percentage of profits will be paid as dividends to shareholder
- In decision-making for the business, there may be divergent opinions between shareholders when it comes to taking the best decisions
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