As Zomato prepares up to get listed on the exchanges in the coming months, the firm undertook a corporate restructuring to convert itself from a private limited company to a public company. Also, Zomato passed a special resolution on April 5 to take this move, amending the Memorandum of Association (MoA) and renaming the company as Zomato Limited from April 09, 2021. In this article, we will cover the latest update regarding Zomato converts into a public company from a private limited Company.
Before talking about the latest update regarding Zomato converts into a public company, first, we discuss the difference between private & public limited company.
Understand about Pvt Ltd and Public Limited Company?
A Private Limited Company is a company that is confidentially held for small enterprises. The liability of the members of a Private Limited Company is restricted to the number of shares respectively held by them. Shares of Pvt Ltd cannot be openly traded. The minimum number of members required to start a private company is two.
A Public limited company is a company listed on a recognized stock exchange and the stocks are traded publicly. The least number of members required to start a public company is seven.
Zomato converts into a public company
Zomato’s public listing is around the corner and the company is involved in the pre-IPO processes. To that effect, the company’s holding entity has been converted from a private company to a public limited company.
Further, Zomato passed a special resolution on April 5 to take this measure, amending the Memorandum of Association (MoA) and renaming the company as Zomato Limited from April 09, 2021.
The company is holding filings of the draft red herring prospectus with the Securities and Exchange Board of India and relevant stock exchange(s) and listing of the equity shares on one or added of the stock exchanges. To undertake the same, the company is obliged to be converted into a public limited company.
The objective of Conversion from Private To public Company
As per the Companies Act 2013, only public limited companies can list with any stock exchange, hence Zomato has converted itself to fulfil the statutory criteria before listing.
Apart from the name change, the company also allowed 44,30,60,73,250 equity shares to all of its preference shareholders upon conversion of the CCPS (Compulsorily convertible preference shares) held by them. This involves all investors, promoters, ESOPs trust and so on. Also, Zomato is among a batch of startups that are seeming to go public in the coming months.
Conversion Process of Private Limited into Public Ltd Company
Under the Preceding Companies Act, 1956, there are numerous points for Conversion of Private Company into Public Company which are as follows:
1 Board Meeting:
Issue notice following the provisions of section 173(3) of the Companies Act, 2013, for convening a meeting of the Board of Directors. This notice has to be published to their respective registered addresses at least 7 days before the date on which the Board Meeting is to be held.
2 Issue of EGM Notice:
Issue Notice of the Extra-ordinary General meeting (EGM) to each member, Directors and the Auditors of the company following the provisions of Section 101 of the Companies Act, 2013.
3 ROC Form filing:
For alteration in Article of Association for conversion of Private Company into a Public company under section 14, few E-forms will be filed with concerned Registrar of Companies at various stages.
4 Documents Required
List of the documents required of the company along with the essential details.
- Digital Signature Certificates (DSC) of all Directors.
- Director Identification Number (DIN) of all Directors.
- Identity proof of all Directors.
- Address proof of all Directors.
- No Objection Certificate from the owner.
- Rent Agreement.
- Copy of utility bills (Not more than two months old)
- Certified copy of the latest financial statements.
- Copy of the latest ITR Filing Acknowledgement.
If you, require any other guidance related to the conversion of Private Limited Company Registration to Public limited company Registration, please feel free to contact our business advisors at 8881-069-069.
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