# Conversion of Private Company ⇄ Public Company (Section 18)

## A. Private Company → Public Company

### Step-by-Step Procedure

Step 1: Special Resolution for Alteration of Articles

Pass a special resolution to alter Articles by deleting the three restrictions of a private company:
Restriction on transfer of shares
Limit of 200 members
Prohibition on inviting public to subscribe securities

Step 2: Special Resolution for Alteration of Memorandum

Pass another special resolution to alter Memorandum for changing name by deleting the word 'private'.

Step 3: Filing with ROC (15 days)

File within 15 days:

Copy of altered Articles
Copy of altered Memorandum

Step 4: Filing Special Resolution (30 days)

File copy of special resolution with ROC within 30 days in Form MGT.14.

Step 5: Fresh Certificate of Incorporation

The ROC shall register and issue a fresh certificate of incorporation.

Step 6: Ensure Minimum Members & Directors

If members are below 7 — increase to at least 7.
If directors are only 2 — increase to at least 3.

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## B. Public Company → Private Company

### Step-by-Step Procedure

Step 1: Special Resolution + Central Government Approval

Pass special resolution to alter Articles by adding the three restrictions of a private company.
Obtain Central Government (CG) approval — this is unique to public-to-private conversion.

Step 2: Special Resolution for Alteration of Memorandum

Pass special resolution to alter Memorandum for changing name by adding the word 'private'.

Step 3: Filing with ROC

File with ROC:

Copy of altered Articles
Copy of altered Memorandum
Copy of CG Approval

Step 4: Filing Special Resolution (30 days)

File copy of special resolution with ROC within 30 days in Form MGT.14.

Step 5: Fresh Certificate of Incorporation

ROC shall register and issue a fresh certificate of incorporation.

Step 6: Reduce Membership if Required

If members exceed 200 — steps must be taken to reduce to 200 or below.

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## Key Differences

Aspect	Pvt → Public	Public → Pvt
CG Approval	Not required	Required
Treatment of restrictions	Deleted	Added
Name change	Remove 'Private'	Add 'Private'
Member adjustment	Increase to ≥7	Reduce to ≤200
Director adjustment	Increase to ≥3	(Not specified)
Time for filing altered docs	15 days	(Not specifically given)
Time for filing SR (MGT.14)	30 days	30 days

Worked example

### Example 1

Example 1 (Pvt → Public): ABC Pvt Ltd has 6 members and 2 directors. It wishes to convert to a public company. It must (a) pass special resolutions to alter MOA and AOA, (b) file altered docs with ROC within 15 days, (c) file MGT.14 within 30 days, (d) increase members from 6 to at least 7 and directors from 2 to at least 3 before/after obtaining fresh COI.

### Example 2

Example 2 (Public → Pvt): XYZ Ltd, a public company with 350 members, wishes to convert to a private company. It must (a) pass special resolution + obtain CG approval, (b) alter MOA to add 'Private', (c) file MGT.14 within 30 days with CG approval copy, (d) reduce membership from 350 to 200 or below.

### Example 3

Example 3: A public limited company passed a special resolution to convert into a private company but did not obtain CG approval. The conversion is invalid — CG approval is a mandatory requirement under the rules for converting public to private.

### Example 4

Example 4: After conversion of XYZ Ltd from public to private, all existing contracts entered into before conversion remain enforceable as if no conversion had taken place (Section 18(3)).

⚠️ Common exam mistakes

Forgetting CG approval for public → private conversion. This is a mandatory step unique to this direction.
Missing the 30-day timeline for filing special resolution in Form MGT.14 with ROC.
Forgetting member/director adjustments (≥7 members & ≥3 directors for public; ≤200 members for private).
Mixing up the 15-day vs 30-day filing timelines.
Forgetting that two separate special resolutions are needed — one for AOA, one for MOA.
Overlooking that the three private company restrictions must be deleted (Pvt→Public) or added (Public→Pvt).
Assuming conversion affects existing contracts — Section 18(3) clarifies it does NOT affect debts, liabilities or contracts.

Bare-Act text Section 18 · The Companies Act, 2013 · click to expand

Section 18 – Conversion of companies already registered: (1) A company of any class registered under this Act may convert itself as a company of other class under this Act by alteration of memorandum and articles of the company in accordance with the provisions of this Chapter. (2) Where the conversion is required to be done under this section, the Registrar shall on an application made by the company, after satisfying himself that the provisions of this Chapter applicable for registration of companies have been complied with, close the former registration of the company and after registering the documents referred to in sub-section (1), issue a certificate of incorporation in the same manner as its first registration. (3) The conversion of a company shall not affect any debts, liabilities, obligations or contracts incurred or entered into, by or on behalf of the company before conversion and such debts, liabilities, obligations and contracts may be enforced in the manner as if such conversion had not been done.

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Conversion of Private Company into Public Company and Vice Versa (Section 18)

Worked example

⚠️ Common exam mistakes