CONVERT PRIVATE TO PUBLIC LIMITED COMPANY ONLINE IN INDIA

CONVERT PRIVATE TO PUBLIC LIMITED COMPANY Services Overview in India

Capitalism may or may not be your cup of tea, but one cannot deny the truth of the world that we are living in, which is going private’. However, do you really support the fact that just because you are wealthy enough, you deserve to get better access to everything? The answer is a conversion from a private to a public limited company.

A business organization is a legal framework that defines a company’s structure, profit dispersal, and liability risk, actually dealing with the owners and investors of the business. It may be carried out for profit or for social welfare. Two forms of the business enterprise include public and private enterprise.

Private limited company- A private limited company is a specific entity in the eyes of law. It is formally set up and registered with Companies House and it issues shares to its shareholders. A striking feature of a private limited company is that it has ‘private ownership’ of its resources and it does not publicly traded share. Its share is limited to a maximum of 50 shareholders. Most of such companies are small as there is no minimum capital requirement for starting this. It is a specific individual’ in the eyes of law such that all the business assets, liabilities, and profits belong to the company itself and the shareholders are just responsible with the extent to their share in the company and not as to their personal property.  According to the Companies Act, 2013, there must be a minimum of 2 shareholders and a maximum of 200 shareholders. The minimum number of directors for a private limited company is 2 and the maximum is 15. Such companies can have only 50 non-employee shareholders but more than 50 employed shareholders. Such companies also must have a Board of Directors, consisting of a minimum of 2 directors. Also, a Chairman is needed for presiding over the meetings of the Board and the Chairman of the company becomes the Chairman of the Board. If there is no Chairman, the Board may elect one out of them to become the Chairman.

Public limited company- They are autonomous or semi-autonomous corporations owned by the State. They are financed by the Government with the operation of industrial, agricultural, financial, or commercial undertakings. They are frequently monopoly services and helpful in implementing government plans and public services. Such companies are direct channels for using foreign money received from industrially advanced countries. The various forms of State enterprise are departmental undertakings, public corporations, and Government company organizations.

Benefits of Conversion of Private Limited Company to Public Limited Company: 

In a developing country like India, public limited companies are badly needed as they can promote economic development in the following ways:

1. By creating social and economic overheads by providing communication and transport facilities, educational facilities, technical training, and medical aid, and public health measures.

2. By building basic heavy industries like iron and steel, engineering and electronic industry which are necessary for economic development.

3. By optimum allocation of resources that are not profit-motivated but guided by social gain.

4. Ensure balanced regional growth by establishing industries in backward regions.

5. Helpful in developing neglected sectors from the national point of view.

6. More productive utilization of surplus labor for capital formation.

7. The profits of a public limited company are a good source of finance for economic development.

8. The Government can make effective planning for development through these companies.

9. Ensure the growth of ancillary industries.