Conversion of Private Company into Public Company and Vice Versa
# Conversion of Private ↔ Public Company
## A. Private → Public Company
Steps required:
1. Pass a Special Resolution (SR) in a general meeting to alter the Articles by removing the three restrictions of Sec 2(68).
2. Intimate the Registrar of Companies (ROC) in the prescribed manner within 15 days of the resolution.
3. Thereafter comply with all provisions applicable to a Public Company (minimum 7 members, 3 directors, etc.).
## B. Public → Private Company
This is more onerous because conversion reduces public participation. The process:
1. Pass a Special Resolution (SR).
2. Obtain approval from the Central Government (powers delegated to Regional Director — RD).
3. Intimate the ROC within 15 days of the RD's approval in the prescribed manner.
4. Comply with the Section 2(68) requirements (insert restrictions in the AOA, cap members at 200, etc.).
## Snapshot
Step
Pvt → Public
Public → Pvt
Special Resolution
✓
✓
CG / RD approval
✗
✓
ROC intimation
Within 15 days of SR
Within 15 days of RD approval
Compliance
Public Co. provisions
Sec 2(68) provisions
Worked example
### Example 1
Example: ABC Pvt Ltd wishes to become a Public Company to raise funds via IPO. The board passes a resolution on 1 June. What is the procedure?
Answer: (i) Convene a General Meeting and pass a Special Resolution altering the AOA; (ii) File the SR and intimation with the ROC within 15 days; (iii) Increase number of members/directors and otherwise comply with Public Company provisions. CG approval is not required for this direction of conversion.
### Example 2
Example: XYZ Ltd (Public) wants to convert to a Private Company. The SR is passed on 10 April; RD approval is received on 1 July. By when must ROC be intimated?
Answer: Within 15 days from 1 July (date of RD approval), i.e., by 16 July.
⚠️ Common exam mistakes
Reversing the requirement of CG/RD approval — it is needed only for Public → Private (not for Private → Public).
Counting the 15-day ROC filing period from the SR for a Public → Private conversion (it actually runs from the RD's approval).
Forgetting to amend the AOA to insert the three Sec 2(68) restrictions after Public → Private conversion.
Bare-Act text Section 14 · Companies Act, 2013 · click to expand
Section 14 — Alteration of Articles: Subject to the provisions of this Act and the conditions contained in its memorandum, if any, a company may, by a special resolution, alter its articles including alterations having the effect of conversion of — (a) a private company into a public company; or (b) a public company into a private company: Provided that where a company being a private company alters its articles in such a manner that they no longer include the restrictions and limitations which are required to be included in the articles of a private company under this Act, the company shall, as from the date of such alteration, cease to be a private company: Provided further that any alteration having the effect of conversion of a public company into a private company shall not be valid unless it is approved by an order of the Central Government on an application made in such form and manner as may be prescribed.