A growing private company preparing for institutional fundraising needs to become a public company first. Under Section 18 that is a contained process: line up seven shareholders and three directors, adopt new articles, pass a special resolution, file two forms, collect a fresh certificate. Going the other way is materially harder, because reducing the public's protections brings the Regional Director and your creditors into it.
Converting a private company to public needs a special resolution, MGT-14 and INC-27, with no Regional Director approval — while going from public to private additionally requires RD approval and a creditor notice process.
The bottom line
Private to public: at least 7 shareholders and 3 directors; special resolution, then MGT-14 within 30 days, then INC-27 within 15 days, then a fresh Certificate of Incorporation. No RD approval.
Public to private: special resolution, MGT-14, then Regional Director approval in Form RD-1 with creditor notice, then INC-28, then INC-27.
Either way: alter the Memorandum's name clause and the Articles. Not available while under investigation, inspection or prosecution, or in default.
What Section 18 covers
The conversion of an already-registered company from one class to another — private to public and back, and OPC, unlimited and Section 8 conversions.
It works through Section 13 to alter the Memorandum and Section 14 to alter the Articles, with Rule 33 of the Companies (Incorporation) Rules, 2014. You change the company's constitution to fit the new class and the Registrar issues a fresh Certificate of Incorporation.
Pre-existing liabilities survive the conversion unchanged. Changing class does not reset anything the company already owes.
Private to public
- Confirm the structural minimums: at least 7 shareholders and 3 directors. Adopt a new set of Articles removing the Section 2(68) private company restrictions — the restriction on share transfer, the cap on members, and the bar on inviting the public.
- Board meeting, then call an extraordinary general meeting.
- Pass a special resolution altering the Memorandum, changing the name from "Private Limited" to "Limited", and the Articles.
- File MGT-14 within 30 days of the resolution.
- File INC-27, the application for conversion, within 15 days of the resolution — but after MGT-14, because INC-27 needs the MGT-14 SRN.
- The Registrar issues a fresh Certificate of Incorporation with the new name.
No Regional Director approval is needed. Expect four to eight weeks.
The sequencing point is worth repeating because it produces most of the rejections: INC-27 has a shorter deadline than MGT-14 but must be filed second.
Public to private, and why it is harder
Going private reduces the protections that public status gives creditors and the market, so Section 14 with Rule 41 adds a gate: Regional Director approval on behalf of the Central Government.
The flow runs special resolution, then MGT-14, then an application to the Regional Director in Form RD-1 within 60 days of the resolution, then a newspaper advertisement and individual notice to creditors and debenture holders inviting objections, then the RD's order, then INC-28 to file that order, then INC-27 to effect the conversion.
The name re-acquires "Private" and the Articles re-adopt the Section 2(68) restrictions.
When you cannot convert
Conversion is blocked where the company is under investigation, inspection or prosecution, or is in default on its statutory filings, its deposits, or debenture and interest repayments.
Clear those first. An open default or proceeding stops the conversion at the Registrar or the Regional Director, after you have already paid for the resolution and the drafting.
Life after conversion to public
Public status brings heavier governance. Depending on the thresholds, the company may need independent directors under Section 149, an audit committee under Section 177 and a nomination and remuneration committee under Section 178. Shares become freely transferable, disclosures tighten, and if the company later lists, the full SEBI regime applies.
Access to public capital comes bundled with that compliance load. Plan the governance build-out alongside the conversion rather than discovering it at the first audit afterwards.
Common mistakes
- Filing INC-27 before MGT-14. INC-27 needs the MGT-14 SRN.
- Missing the structural minimums. Private to public needs 7 shareholders and 3 directors in place before filing.
- Reusing the old Articles. Adopt a fresh set that drops the Section 2(68) restrictions, or adds them back when going private.
- Attempting to go private without Regional Director approval and creditor notice.
- Converting while in default or under investigation, which will simply be blocked.
A working routine
- Decide the direction and confirm eligibility — no default or investigation, and the structural minimums for public status.
- Adopt the appropriate new Articles, then board resolution, then the special resolution altering the Memorandum and Articles.
- File MGT-14 within 30 days.
- Private to public: file INC-27 within 15 days, after MGT-14, and collect the fresh certificate.
- Public to private: file RD-1, advertise, notify creditors, obtain the order, then INC-28 and INC-27.
- Update the name everywhere, and build out the governance a public company requires.
Frequently asked questions
What does converting a private company to public require? At least 7 shareholders and 3 directors, a special resolution, MGT-14 within 30 days, INC-27 within 15 days, and a fresh Certificate of Incorporation. No RD approval.
Is public to private conversion harder? Yes. It needs Regional Director approval in Form RD-1, a newspaper advertisement and individual creditor notice, on top of the special resolution and filings.
Which forms are used? MGT-14 for the resolution and INC-27 for the conversion. Public to private also uses RD-1 and INC-28.
Can a company convert while in default? No. Conversion is barred while under investigation, inspection or prosecution, or in default on filings, deposits or debentures.
What changes after going public? Free transferability of shares, tighter disclosures, and depending on thresholds independent directors and board committees. SEBI rules apply if it lists.
Do our existing liabilities change? No. Pre-existing liabilities survive the conversion exactly as they were.
Primary sources
- Section 18, with Sections 13 and 14, Companies Act, 2013
- Rules 33 and 41, Companies (Incorporation) Rules, 2014; Forms MGT-14, INC-27, RD-1 and INC-28
- Sections 149, 177 and 178 for post-conversion governance, as applicable