Can I change my company from a private company to a public company? (LTD/LLC – PLC)
Yes, you can. First, we will differentiate a private company from a public company.
A limited liability company, also referred to as a private company limited by shares is restricted from offering its shares to the public, while a public company is a company that the transfer of its shares is unrestricted, therefore open to the public to buy shares or debentures or deposit money for fixed periods. Any company that is not a private company shall be a public company and its memorandum shall state so
According to the Companies and Allied Matters Act, to convert your company from being private to public, you have to re-register it as a public company, with the following steps;
- A special resolution that it should be so re‐registered is passed
- An application for re‐registration is delivered to the Corporate Affairs Commission.
The special resolution will state that the company’s memorandum should be altered to state that the company is to be a public company, the memorandum and Articles are then altered to conform with the requirements of the CAMA with respect to the memorandum and articles of a public company.
The application is to be signed by at least one director and the secretary of the company and the following documents to be submitted with it;
(a) a printed copy of the memorandum and articles as altered in pursuance of the resolution and
(b) a copy of a written statement by the directors and the secretary certified on oath by them, and showing that the paid up capital of the company as at the date of the application is not less than 25 per cent of the authorized share capital as at that date; and
(c) a copy of the balance sheet of the company as at the date of the resolution or the preceding 6 months, whichever is later and
(d) a statutory declaration in the prescribed form by a director and the secretary of the company, stating that the special resolution required under this section has been passed and that the company’s net assets are not less than the aggregate of the paid up share capital and undistributable reserves; and
(e) a copy of any prospectus or statement in lieu of prospectus delivered within the preceding 12 months to the Securities and Exchange Commission.
If the Commission is satisfied that a company has complied with the provisions of this section and may be reregistered as a public company, it shall;
(a) retain the application and other documents delivered to it,
(b) register the application and other documents and
(c) issue to the company a certificate of incorporation, stating that the company is a public company.
Upon the issue to a company of the certificate of incorporation,
(a) the company shall by virtue of the issue of that certificate become a public company and
(b) any alterations in the memorandum and articles set out in the resolution shall take effect accordingly.
Reference- S. 50 CAMA
Note that a company shall not be re‐registered as a public company if it has previously been re‐registered as an unlimited company.
Team 618 Bees
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