Form INC-27: Conversion of Private Company to Public Company and Vice Versa

When INC-27 is used

Section 14 lets a company alter its articles to convert from private to public or public to private, and Section 18 deals with conversion of one class of company into another. INC-27 is the form that registers the conversion with the Registrar, after which a fresh certificate of incorporation is issued.

The conversion does not affect the company's existing debts, liabilities, obligations or contracts, which continue as before. The CIN changes to reflect the new status, so bank and tax records need updating afterwards.

Private companies often convert to public before an IPO, to raise money from a larger investor base, or because they have crossed limits that require public status. Public companies convert to private to reduce compliance when wider shareholding is not needed.

Private to public conversion

The company passes a special resolution to alter its articles, removing the restrictions that define a private company, and files MGT-14. It must meet the requirements of a public company, including at least three directors and seven members. The word Private is removed from the name as part of the conversion; INC-24 is not needed for that change.

The MCA instruction kit for INC-27 indicates filing within 15 days of the special resolution, and MGT-14 is due within 30 days. Filing both promptly avoids additional fees and inconsistent records.

Public to private conversion

Rule 33, as substituted on 19 January 2023, places approval with the Regional Director. The company passes a special resolution, then applies to the Regional Director in Form RD-1. After the order, the company files INC-27 with the Registrar within 15 days of receiving it, quoting the RD-1 SRN and attaching the altered e-MoA and e-AoA.

The Regional Director checks that members and creditors are not prejudiced, so the application usually discloses the shareholding, creditors and any objections received. Expect the process to take longer than a private to public conversion, and keep the special resolution and creditor details current while the application is pending.

Attachments, fees and certification

The fee is the document filing fee of ₹200 to ₹600 based on nominal capital, with the standard additional fee multiples for delay. INC-27 is signed by an authorised director, manager, CEO, CFO or company secretary with DSC. Practising professional certification is required for unlimited to limited conversions.

• Copy of the special resolution and minutes of the meeting
• Altered articles, and memorandum where applicable
• Regional Director's order, for public to private
• For unlimited to limited: declarations, list of creditors, auditor's certificate and newspaper notice

Penalties and common mistakes

Where no specific penalty applies, delays can attract the general penalty under Section 450. More practically, until INC-27 is approved the company's status on MCA does not change, which affects fundraising and contracts that depend on it.

Common errors include filing INC-27 before MGT-14 is approved, not meeting the minimum directors and members for a public company, articles that still contain private company restrictions, and missing the 15-day window after the RD order. Refogo's partner professionals can manage private to public conversion for a fixed fee.

Step by step

1. 1Board meeting

   Approve the conversion and call a general meeting.

2. 2Special resolution

   Members approve the conversion and altered articles.

3. 3File MGT-14

   Register the special resolution within 30 days.

4. 4Obtain RD order if needed

   For public to private, apply in RD-1 and await the order.

5. 5File INC-27

   Attach resolution, altered documents and any order; sign with DSC.

6. 6Receive new certificate

   The Registrar issues a fresh certificate of incorporation.