A limited liability company is a private entity. A company can issue shares and have shareholders, but the company’s shares are not traded on public stock exchanges such as his BSE or NFT and are not issued through an initial public offering (IPO) . This means private companies do not have to meet the strict Securities and Exchange Commission (SEC) filing requirements for public companies. Stocks of privately held companies are less liquid, but it is not at all easy to determine the valuation of the stock.
What is a public limited company?
Public Ltd Company (PLC) sells all or part of itself through an initial public offering or initial public offering. In public companies, shares are not limited to being transferred to the general public as in limited liability companies.
What are the minimum requirements for a conversion?
Here are some of the minimum requirements for converting a private limited company to a public company.
Minimum 7 Shareholders
- Director DSC
- All Directors DIN KYC
- No Minimum Paid-in Capital
- Directors and Shareholders Can Be the Same Person
- Minimum 3 Directors
Advantages of Converting a Limited Liability Company into a Public Company Shares
Converting a private company to a public company allows the company to list its shares on the stock exchange. Although important for companies looking to raise capital.
Public Funding You can raise public funds by listing your shares on exchanges such as BSE and NFT. Various forms of sharing are available. Your company can raise investments through forms of equity such as preferred stock, shares.
Limitation of Liability
After the conversion of a limited liability company to a stock company, the concept of limited liability remains.
Free Transfer of Shares Shares of Public Ltd are freely transferable in accordance with the Securities and Exchange Board of India (SEBI) Act and the Companies Act.
Easy Acceptance of Funds
A public limited company may accept funds from a public company under section 76 of the Companies Act 2013. A corporation can list its shares on a public stock exchange. The process of listing shares on a public stock exchange definitely enhances a company’s reputation.
Receipt of Contributions
A public limited company is entitled to receive contributions under Section 76 of the Companies Act 2013.
What are the requirements after conversion?
- I need to apply for a new PAN/TAN card.
- All business letterhead and related stationery must be updated with the company’s new name.
- Company bank details need to be updated.
- DSC (Digital Signature Certificate) must be present.
- Notice of conversion to a joint stock company must be submitted to tax authorities and other competent authorities.
- Hard copies of new MOAs and AOAs should be made as soon as possible.