Setting Up of Business, Industrial and Labour Laws · Conversion of Business Entities

Conversion Between Private, Public and Unlimited Companies

Updated 11 October 2026 · Fact-checked

Conversion means changing a company's class without winding it up. A private company becomes public, or the reverse, by a special resolution altering its articles under Section 14. A public-to-private conversion also needs Central Government approval. The altered articles are filed with the Registrar, and the name changes by adding or deleting "Private".

Understand Conversion Between Private, Public and Unlimited Companies

A company can change its class during its life. It stays the same legal person. Only its type changes. The main changes covered here are private to public and public to private. You should also know the reserve capital rule for an unlimited company that registers as limited (Section 65), and the registration of other entities under Section 366.

The articles of a private company carry the restrictions required by the Act. These include limits on transfer of shares, a cap on members and a ban on inviting the public to subscribe. Remove these restrictions and the company becomes public. Add them and it becomes private. That is why conversion is done through alteration of articles under Section 14.

Section 14(1) says a company may, by a special resolution, alter its articles, including alterations that convert a private company into a public company or a public company into a private company. There is a built-in rule. If a private company alters its articles so that they no longer include the required restrictions, it ceases to be a private company from the date of that alteration.

Public to private is harder. The second proviso to Section 14(1) says such an alteration is not valid unless approved by an order of the Central Government on an application in the prescribed form and manner. Earlier, this approval was from the Tribunal. The text now says Central Government.

The name also changes. Under Section 13(2), a name change needs Central Government approval in writing. But the proviso says no approval is needed where the only change is deleting or adding the word "Private" because of conversion between classes. The proviso dispenses only with the Central Government approval. Section 13(3) speaks of a change in name made under Section 13(2), and the text does not settle whether a conversion name change falls within it. So do not assert in your answer that the fresh-certificate rule of Section 13(3) governs the conversion name change. Do not say that Section 14 itself requires a fresh certificate.

Section 65 deals with an unlimited company having share capital that passes a resolution for registration as a limited company. By that resolution it may increase the nominal amount of each share, with the increase callable only on winding up, or make a specified portion of its uncalled capital callable only on winding up. It may do either or both.

Section 366 is not a conversion-of-class provision. It allows registration under the Act of entities formed under other laws, including partnership firms, limited liability partnerships, cooperative societies and societies. Under Section 366(2), the company must consist of two or more members. It may register as an unlimited company, a company limited by shares, or a company limited by guarantee. A company already registered under the Companies Act, 1956 or the earlier Indian Companies Acts cannot use this section. Registration needs the assent of a majority of members present, in person or by proxy where proxies are allowed, at a general meeting summoned for the purpose. The majority must be not less than three-fourths of the members present where a company whose members' liability is not limited by any law is about to register as a limited company, whether limited by shares or limited by guarantee. A company with fewer than seven members must register as a private company.

Key rules to remember

Alteration of articles (Section 14(1)): Special resolution → alter articles → private ⇄ public; Subject to the Act and any conditions in the memorandum.
Deemed ceasing to be private (Proviso to Section 14(1)): Private-company restrictions removed from articles ⇒ company ceases to be private from the date of alteration; The conversion takes effect by operation of law on that date.
Public to private approval (Second proviso to Section 14(1)): Alteration is not valid unless approved by order of the Central Government; Application is in the prescribed form and manner. Private to public needs no such approval under Section 14.
Filing with Registrar (Section 14(2)): Within 15 days: alteration + copy of Central Government order (if any) + printed copy of altered articles; The Registrar registers it. Once registered, it is valid as if originally in the articles (Section 14(3)).
Name change on conversion (Section 13(2)): Only adding or deleting "Private" ⇒ no Central Government approval needed; Any other name change needs written approval. The proviso dispenses only with the approval. Do not assert that Section 13(3) governs the conversion name change.
Alteration of memorandum (Section 13(1), (6), (10)): Special resolution → file with Registrar → effective only on registration; Filing of the special resolution is under Section 13(6)(a). No alteration has effect until registered.
Unlimited to limited, reserve capital (Section 65): Resolution for registration as limited: increase nominal share amount and/or make part of uncalled capital callable only on winding up; Either or both. The increase or portion is callable only in the event and for the purposes of winding up.

How to solve Conversion Between Private, Public and Unlimited Companies questions

Use one fixed method for any conversion question. It keeps your answer in ICSI style: provision, facts, conclusion.

1Identify the direction: private to public, public to private, or unlimited to limited.
2State the governing provision: Section 14 for private and public, Section 13 for memorandum and name, Section 65 for unlimited to limited reserve capital.
3Name the resolution needed. For articles, it is a special resolution under Section 14(1). Check whether the articles or memorandum impose extra conditions.
4Add the approval step. Public to private needs a Central Government order. Private to public does not need approval under Section 14.
5Deal with the name. Adding or deleting "Private" needs no Central Government approval, under the proviso to Section 13(2). The proviso dispenses only with that approval. Do not assert that Section 13(3) governs this name change.
6State the filings. Altered articles, with any Central Government order and a printed copy, go to the Registrar within 15 days. A memorandum alteration is effective only on registration.
7Apply the rule to the facts given in the question, for example removing transfer restrictions.
8Close with a clear conclusion: whether the conversion is valid, and from which date.

Quickest way: Direction, resolution, approval, filing

When to use it: Use this for short-answer or case-study questions when time is tight.

Write the direction in one line.
Write: special resolution under Section 14(1).
Write approval: Central Government for public to private, none for private to public.
Write filing: Registrar within 15 days with printed articles.
Write conclusion with effect date, and the name change point.

Common mistakes in Conversion Between Private, Public and Unlimited Companies

Saying private to public needs Central Government approval under Section 14.
Students mix it up with the proviso for public to private conversion.
Fix: Remember the second proviso applies only to public into private. Private to public needs only the special resolution and filing.
Writing that the Tribunal approves public to private conversion.
Older study notes and the pre-2019 law gave this role to the Tribunal.
Fix: Write Central Government, as the current text of Section 14 states.
Using an ordinary resolution to alter the articles.
Students forget that conversion changes the class of the company.
Fix: Always write special resolution for Section 14(1) and Section 13(1).
Claiming the company stays private until it files with the Registrar.
Students miss the proviso to Section 14(1).
Fix: If the restrictions are removed from the articles, the company ceases to be private from the date of alteration.
Saying Central Government approval is needed for dropping the word "Private" from the name.
Students apply the general rule on name change in Section 13(2).
Fix: Quote the proviso: no approval is needed where the only change is adding or deleting "Private" on conversion.
Confusing Section 61 with conversion between classes.
Both deal with alteration, so the sections blur together.
Fix: Section 61 alters share capital of a limited company. Conversion of class uses Section 14, and Section 13 for memorandum and name.

Worked examples

Example 1

Sundaram Textiles Private Limited wants to become a public company. Advise on the procedure under the Companies Act, 2013.

Show the solution

Provision: Section 14(1) allows a company, by special resolution, to alter its articles, including alterations converting a private company into a public company.
Facts: The company must pass a special resolution removing the restrictions required for a private company from its articles, subject to any conditions in its memorandum.
Name: The proviso to Section 13(2) says no Central Government approval is needed where the only change is deleting the word "Private". The proviso dispenses only with that approval.
Filing: Under Section 14(2), the alteration and a printed copy of the altered articles must be filed with the Registrar within fifteen days. The Registrar registers them.
Effect: Once registered, the altered articles are valid as if originally in the articles (Section 14(3)).

Answer: Sundaram Textiles Private Limited can become public by a special resolution altering its articles under Section 14(1). No Central Government approval is needed under Section 14 for this direction. It drops "Private" from its name without Central Government approval and files the altered articles with the Registrar within fifteen days.

Example 2

Kaveri Industries Limited, a public company, passes a special resolution to convert into a private company. Is the conversion valid once the resolution is passed? State the position.

Show the solution

Provision: Section 14(1) permits conversion of a public company into a private company by special resolution altering the articles.
Condition: The second proviso says such an alteration shall not be valid unless approved by an order of the Central Government on an application in the prescribed form and manner.
Facts: Kaveri has only passed the special resolution. It has not obtained the order.
Filing: Under Section 14(2), the alteration, a copy of the Central Government order and a printed copy of the altered articles are filed with the Registrar within fifteen days.
Name: Adding the word "Private" needs no separate Central Government approval, under the proviso to Section 13(2).

Answer: No. The conversion is not valid on the resolution alone. It becomes valid only when the Central Government approves it by order. Then Kaveri files the alteration, the order and the printed articles with the Registrar within fifteen days.

Exam tips

Write the section number with every step. Section 14 for articles, Section 13 for memorandum and name, Section 65 for unlimited to limited.
For comparison questions, use two columns in your answer: resolution, approval, name change, filing. Public to private differs mainly on approval.
Always mention the 15-day filing period and the printed copy of altered articles.
In case studies, check whether restrictions were removed from the articles. That decides when a private company ceases to be private.
Do not cite a Tribunal for public to private conversion. Use Central Government.

Practice questions from Conversion of Business Entities

Conversion Between Private, Public and Unlimited 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 Between Private, Public and Unlimited Companies: frequently asked questions

What resolution is needed to convert a private company into a public company?

A special resolution altering the articles under Section 14(1). The company must remove the restrictions required for a private company. It then files the alteration with the Registrar within fifteen days.

Does public to private conversion need approval?

Yes. Under the second proviso to Section 14(1), the alteration is not valid unless approved by an order of the Central Government. The order is filed with the Registrar along with the altered articles.

Does the company need approval to drop or add the word Private in its name?

No. Under the proviso to Section 13(2), no Central Government approval is needed where the only change is adding or deleting "Private" because of conversion. The proviso removes only that approval requirement. Do not state that Section 13(3) governs this name change.

What does Section 65 say about unlimited companies becoming limited?

An unlimited company with share capital may, by its resolution for registration as a limited company, increase the nominal amount of each share or make part of its uncalled capital callable only on winding up. It may do either or both.