Corporate and Economic Laws · Company Formation and Conversion

Conversion of Companies under the Companies Act, 2013

Updated 11 October 2026 · Fact-checked

Conversion of a company means changing its class or status under the Companies Act, 2013. Private and public conversions are done by a special resolution altering the articles (Section 14). Conversion between other classes is done under Section 18 by altering the memorandum and articles, and the Registrar issues a fresh certificate of incorporation.

Understand Conversion of Companies

A company is not stuck with the form it was born in. It can change its class as its business grows or its needs change. A family business may want public money, or a public company may want fewer restrictions. The Act allows this, but only through a set procedure.

There are two main routes in the text you have. Section 14 deals with altering the articles, including alterations that convert a private company into a public company or a public company into a private company. Section 18 is the general rule: a company of any class registered under the Act may convert itself into a company of another class by altering its memorandum and articles. The Registrar closes the former registration and issues a certificate of incorporation in the same manner as its first registration.

Private to public is simple in law. Section 14 requires a special resolution. There is also an automatic rule: if a private company alters its articles so that they no longer include the restrictions and limitations required for a private company, it ceases to be a private company from the date of the alteration.

Public to private needs more. The special resolution is not enough. Under the second proviso to Section 14(1), the alteration is not valid unless it is approved by an order of the Central Government on an application in the prescribed form and manner. Earlier, the Tribunal gave this approval; the 2019 amendment replaced it with the Central Government. Pending Tribunal applications on the commencement date of the 2019 amendment are disposed of by the Tribunal under the earlier provisions.

The filing rule is in Section 14(2). Every alteration, with a copy of the Central Government order approving it where required, goes to the Registrar with a printed copy of the altered articles within fifteen days, and the Registrar registers it. Once registered, the alteration is valid as if it were originally in the articles (Section 14(3)). Under Section 18(3), conversion does not affect debts, liabilities, obligations or contracts incurred before it. They can be enforced as if no conversion had happened.

The limited and unlimited position needs care. Section 3(2) says a company may be limited by shares, limited by guarantee, or unlimited. Section 65 deals with an unlimited company that has share capital and registers as a limited company. By resolution it may increase the nominal amount of its shares, or provide that part of its uncalled capital can be called up only on winding up. This is reserve share capital. The text supplied does not give a separate procedure for limited to unlimited conversion beyond the general Section 18 rule, so state it as conversion by altering the memorandum and articles.

A Section 8 company is special. It cannot alter its memorandum or articles without previous Central Government approval, and it may convert itself into another kind of company only after complying with prescribed conditions (Section 8(4)).

Key rules to remember

Private to public or public to private: Special resolution + alteration of articles (Section 14(1)); Section 14 applies subject to the Act and the conditions in the memorandum, if any.
Automatic loss of private status: Articles drop private company restrictions ⇒ ceases to be private from date of alteration; This is the first proviso to Section 14(1).
Public to private validity: Valid only if approved by an order of the Central Government; Second proviso to Section 14(1). The Tribunal no longer approves this.
Filing after alteration: File with Registrar within 15 days: alteration, copy of Central Government order, printed altered articles (Section 14(2)); Registrar registers it. Once registered it is valid as if originally in the articles (Section 14(3)).
Conversion of class: Alter memorandum and articles; Registrar closes old registration and issues a certificate of incorporation (Section 18(1)-(2)); Registrar must first be satisfied that the Chapter's registration provisions are complied with.
Effect on liabilities: Debts, liabilities, obligations and contracts remain enforceable (Section 18(3)); Conversion does not wipe out or change earlier commitments.
Unlimited to limited: reserve capital: Section 65(a) and (b): increase nominal amount of shares, or make part of uncalled capital callable only on winding up; The increased or reserved portion cannot be called up except in winding up and for its purposes.
Section 8 company conversion: Needs prescribed conditions (Section 8(4)(ii)); alteration of memorandum or articles needs previous Central Government approval (Section 8(4)(i)); Name drops Limited or Private Limited only under licence.

How to solve Conversion of Companies questions

Use this method for any conversion question, whether it is a short note, a case study or an MCQ.

1Identify the starting class and the target class: private, public, limited, unlimited or Section 8 company.
2Pick the governing provision. Private and public conversions go to Section 14. Other class changes go to Section 18. Unlimited to limited with reserve capital goes to Section 65.
3State the approval needed. A special resolution is needed for private to public. Public to private also needs a Central Government order.
4Check for special cases, such as a Section 8 company needing prior Central Government approval and prescribed conditions.
5State the filing: Registrar, fifteen days, copy of order where required, printed altered articles.
6State the effect: new registration or valid alteration, and unaffected debts and contracts under Section 18(3).
7Apply the rule to the facts in the question and give a clear conclusion.

Quickest way: Three-question check for conversion questions

When to use it: Use this for MCQs and case-study questions where you have only a minute or two.

Ask which direction: private to public needs a special resolution; public to private needs a special resolution and Central Government approval.
Ask who approves: the Central Government now, not the Tribunal, for public to private.
Ask what happens after: file with the Registrar within fifteen days, and old liabilities stay enforceable.

Common mistakes in Conversion of Companies

Saying the Tribunal approves conversion of a public company into a private company.
Older books and notes give the Tribunal as the authority.
Fix: Write that the alteration is not valid unless approved by an order of the Central Government, as amended in 2019.
Saying an ordinary resolution is enough to convert private to public.
Students confuse alteration of articles with routine business.
Fix: State that Section 14 requires a special resolution to alter articles.
Missing the automatic loss of private status.
Students think a formal conversion application is always needed.
Fix: Remember the first proviso: if articles no longer contain private company restrictions, the company ceases to be private from the date of alteration.
Forgetting the fifteen-day filing and the printed altered articles.
Students stop at the resolution and ignore the filing.
Fix: Close every answer with Section 14(2): file within fifteen days with the Registrar, with a printed copy of the altered articles and any approval order.
Saying conversion cancels existing debts and contracts.
Students treat a fresh certificate as a new company.
Fix: Quote Section 18(3): earlier debts, liabilities, obligations and contracts can be enforced as if the registration had not been done.
Treating a Section 8 company like any other company.
Students overlook its special restrictions.
Fix: State that it cannot alter its memorandum or articles without previous Central Government approval, and can convert only after complying with prescribed conditions.

Worked examples

Example 1

Ananya Foods Private Limited wants to become a public company. Its board asks what must be done and filed. Advise.

Show the solution

Starting class is private and the target is public, so Section 14 applies.
The company must pass a special resolution altering its articles so that they no longer contain the restrictions and limitations required for a private company.
Under the first proviso, once the articles stop including those restrictions, the company ceases to be a private company from the date of alteration.
The company must file the alteration with the Registrar, together with a printed copy of the altered articles, within fifteen days (Section 14(2)).
The Registrar registers it, and it is valid as if originally in the articles (Section 14(3)).

Answer: Pass a special resolution altering the articles under Section 14, then file the alteration and printed altered articles with the Registrar within fifteen days. No Central Government order is required for this direction.

Example 2

Bharat Textiles Limited, a public company, wants to become a private company by a special resolution. Its directors say the company becomes private on passing the resolution. Is this correct? What are the next steps?

Show the solution

Public to private conversion falls under Section 14(1)(b).
A special resolution altering the articles is needed, but the second proviso says the alteration is not valid unless approved by an order of the Central Government.
So the directors are wrong. The resolution alone does not complete the conversion.
The company must apply to the Central Government in the prescribed form and manner.
After approval, it must file the alteration and a copy of the Central Government order with the Registrar, with a printed copy of the altered articles, within fifteen days.
The Registrar registers it, and the alteration is then valid as if originally in the articles.

Answer: The directors are not correct. The alteration is not valid unless approved by an order of the Central Government. The company must then file within fifteen days with the Registrar.

Exam tips

Write section numbers only where certain: Section 14 for private and public conversions, Section 18 for class conversion, Section 65 for reserve capital, Section 8(4) for Section 8 companies.
In a case study, state the authority first: Central Government for public to private, Registrar for filing.
Always mention special resolution, fifteen days and printed altered articles in procedure answers.
For MCQs, watch for options that name the Tribunal or an ordinary resolution. These are usual traps.
Mention Section 18(3) when asked about the effect on debts and contracts.

Practice questions from Company Formation and Conversion

Conversion of Companies in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Conversion of Companies: frequently asked questions

What is the procedure to convert a private company into a public company?

The company passes a special resolution altering its articles under Section 14. Once the articles no longer carry the restrictions required for a private company, it ceases to be private from the date of alteration. It must then file the alteration and printed altered articles with the Registrar within fifteen days.

Who approves conversion of a public company into a private company?

The alteration is not valid unless approved by an order of the Central Government on an application in the prescribed form and manner. A special resolution altering the articles is also needed. The Tribunal's earlier role was replaced by the 2019 amendment.

How is a limited company converted to an unlimited company?

The general rule in Section 18 allows a company to convert into another class by altering its memorandum and articles. The Registrar closes the old registration and issues a certificate of incorporation. The supplied text does not set out a separate step-by-step procedure for this specific case.

Does conversion affect the company's existing debts and contracts?

No. Under Section 18(3), registration on conversion does not affect debts, liabilities, obligations or contracts incurred before conversion. They can be enforced as if the registration had not been done.