Can I change my company from a private company to a public company? (LTD/LLC – PLC)

Can I change my company from a private company to a public company? (LTD/LLC – PLC)

June 14, 2019

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;

  1. A special resolution that it should be so re‐registered is passed
  2. 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

 

 

 

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer.This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

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Frequently Asked

  • When are Annual Returns due for filing?

    A company’s first Annual Returns are due for filing after 18 months of its inception, subsequently it should be filed annually as the name implies. The filing dates could differ for each company depending on their financial year end but must be filed not later than 42 days after its Annual General Meeting.

    The Annual Returns for Business Names is due not later than the 30th of June each year except in the year the business was registered.

  • What is the first thing I must do to register a business in Nigeria?

    To register a business in Nigeria; you would need to conduct a name search of the business. You can achieve this using your CAC-CRP account.

  • Is there a penalty for late renewal of registration of products with NAFDAC?

    Yes, there is a late renewal fee, which is dependent on the category of the product.

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  • What’s the difference between a business name and an LLC?
    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 

  • What is a trademark?

    A trademark can be any word, sign, symbol or graphic that you apply to your company, goods or services to distinguish them from those of your competitors; for example, a brand, product or company name, or logo. The trademark serves as a badge of origin for your business and its brands and products, and can consist of words, logos, slogans, colours and shapes, or a combination of all of these.

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