In India there are some definite rules that you need to follow in order to change the kind of company that you are looking for. There are forms need to be filed and documents that have to be provided. Then, there are authority bodies whose rules and regulations you need to follow and whose decisions you need to honor.
In this article, we cover only the conversion process of Pvt Ltd Company into Public, Limited Liability Partnership, One Person Company, Trust, Section 8 Company and NBFC.
Conversion of a Private Limited Company into a Public Company
1. Call a Board Meeting
2. Pass the Board Resolution Approval from Directors
3. Issue an Extraordinary General Meeting (EGM) Notice
4. Holding of Extraordinary General Meeting for the Purpose
5. Filing of Forms with ROC through
And you need to submit some important documents regarding to this conversion are -
Attachments of e-Form MGT-14
Attachments of e-Form INC-27
The first thing is that you need to do in order to change from a private company to a public one is to call a board meeting. The notice has to be issued just the way it has been stated in the Section 173 (3) of the Companies Act, 2013. The main agenda of the meeting would be to make sure that the directors approve, in principle, your conversion to a public company through alterations made to the Articles of Association (AOA) and Memorandum of Association (MOA).
The second step requires you to issue a notice for an EGM (extraordinary general meeting). The notice would have to be issued as per the way stated in the Section 101 of the Companies Act, 2013.
In the third step, you would have to hold the EGM itself. The meeting has to be held on the date that has been specified in the notice issued for the purpose. Here you need to pass the special resolution whereby shareholders agree to the change.
In the fourth stage the ROC (Registrar of Companies) form would have to be filed. Here you would need to file two e-forms – e-form MGT 14 and e-form INC 27. There are also some important documents that need to be submitted in this regard. After this your documents and other submissions would be scrutinized by ROC. Before it issues the certificate, it should be satisfied that you have done all that you need to do.
Once you are able to convert to a public company there are some formalities that you would need to take care of.
Convert a Pvt. Ltd Company into an LLP (Limited Liability Partnership)
Process for conversion of private limited company into LLP
1. Call a Board Meeting and pass the Resolution for conversion of Pvt Ltd to LLP
2. Obtain DIN of all proposed Designated Partner for whom it don’t have already
3. Need to file LLP eform-1 to get approval of converting a private company into LLP
4. LLP Form-18 and Form-2 required to be filed for the conversion
5. File LLP Form-3 regarding to LLP Agreement
6. Intimate the conversion to Registrar in LLP Form-14
The process of changing a private company into an LLP is rather straightforward. First of all, you have to call a board meeting where you decide to change the name of the company making sure that it ends with the word LLP. A resolution needs to be passed for that purpose. Before you do this however, you need to get the DIN (director identification number) for your designated partners who do not have it already.
In the second stage, you have to file for approval for the new name of your company. For this, you need to file the e-form LLP-1. Here you need to attach the special resolution passed by the board of directors regarding said conversion.
After this, ROC issues the name approval certificate. In the fourth stage, you have to file the incorporation documents with ROC. Here you need to file the e-form LLP-2. Certain important documents such as proof of address need to be furnished at this stage.
In the fifth stage, you need apply for conversion along with the e-form LLP-18. In the sixth stage you need to sign and submit the LLP agreement. This needs to be done within 30 days of having received approval for the forms already mentioned. Here you need to file the e-form LLP-3. After this, if everything is okay the respective department will issue the incorporation certificate.
Then you would have to intimate the conversion to the registrar along with the e-form LLP-14.
Conversion of a Private Limited Company into an OPC (One Person Company)
Just like other kinds of companies in India there is a definite procedure that needs to be followed when you are changing a private company into an OPC.
See the step-wise process for converting Pvt Ltd into OPC
1. Calling a Board Meeting
2. Issue an EGM Notice to all Members/ Shareholders
3. Calling and Holding a General Meeting
4. File Forms with ROC for Conversion (i.e. MGT-14)
5. File an Application in Form INC-6
6. Review is Conducted by ROC and Issue Certificate for OPC
The first thing that you need to do is call a board meeting. After that you have to issue the EGM notice to all the members, the auditors, and the directors of the company. This needs to be done as has been stated in the Section 101 of the Companies Act, 2013. After that you need to hold a general meeting.
The fourth step over here calls for you to file an ROC form. Here you would need to file the special resolution that has been passed by the shareholders for said conversion. This form – MGT 14 – has to be filed within 30 days of passing the special resolution. Here you also need to furnish the prescribed fees along with attachments such as a notice of EGM and a certified true copy of the special resolution.
In the fifth step, you would have to file an application in form INC 6 along with fees as prescribed in the Companies (Registration Offices and Fees) Rules, 2014 and certain important documents. One of the documents is a declaration of the willingness to convert.
In the final stage, ROC would review all the forms and documents submitted by you and issue to you the certificate that says that you are now an OPC.
Conversion of Pvt. Ltd Company into Trust
There are three simple steps that you need to follow in order to change your private company into a trust.
First of all, you need to apply for name change. You need to do this with the ROC in your state. Normally, in this case you would be using the e-form INC-1 to make the application. You would also have to submit INR 1000 along with the application. This can be done through your net banking or credit card.
In the second stage, you have to apply with the form RD-1. In this case too, the application would have to be made to the concerned ROC and form INC-12 will have to be attached to form RD-1. Here you would need to submit a number of important documents such as the draft MOA (Memorandum of Association) of the new company. This needs to be done according to form INC-13. Along with it you have to submit the draft AOA as well. You also need to provide a declaration in Form INC-14 with statements from an advocate, a cost accountant, a chartered accountant, or your company secretary. You also need to furnish a statement showing your liabilities and assets on the date when you applied or at least 30 days before that.
In the final stage, once you are approved, you need to issue an advertisement in the newspaper where you intimate all regarding the change.
Conversion of a Private Company into a Section 8 Company
There are four major steps that you need to follow in order to change a private company to a Section 8 one.
In the first stage you would need to apply for the reservation of your new company’s name. This application needs to be made with the ROC in the state that you are looking to operating in.
In the second stage, you would have to apply for conversion through the e-form RD-1. You also need to submit some fees, as has been prescribed in these cases. You also have to submit certain important documents such as form INC-12 along with the application in these cases. Some other important documents in these cases are the draft MOA and AOA of the company that you are about to form.
In the third stage you would have to issue a notice in the newspaper whereby you inform people of the application made for the conversion. This notice would be issued in form INC-26 and has to be done within a week of having made the application. Do remember that you would need to pay for this from your own pocket.
In the final stage, ROC issues you the license in order to operate as a Section 8 company. The license would be granted under Section 8 of Companies Act. 2013. This is normally done following consultations with other authority and regulatory bodies in the state government and the central government.
Conversion of a Private Company into an NBFC (Non-Banking Financial Company)
There is no need to change a private company into an NBFC as such. At least, there are no elaborate procedures that need to be followed in this case as you would do with the other types of companies that we have dealt with over here.
The major reason for such an assertion is the fact that here you are not changing the type of your company. You are merely starting a type of business. At any rate, if you wish to work as an Non-Banking Financial Company you need to apply with the apex banking body in the country – the Reserve Bank of India.
The first thing that you need to do in this regard is visit the regional or zonal office of RBI in your area. It is here that you would get all the information on the forms that you need to fill, and the annexure and disclosures that you need to furnish with your application.
As has been mentioned in the Companies Act, you would need to amend the main object clause of your organization so that you could include the provisions necessary for working as an NBFC.