Singapore
  • Hong Kong
  • UK
  1. Osome Blog Singapore
  2. How To Convert A Private Limited Company Into A Public Limited Company

How To Convert A Private Limited Company Into A Public Limited Company

How To Convert A Private Limited Company Into A Public Limited Company

Transitioning your private limited company into a public limited company is an exciting journey that opens a new door of opportunities and comes with its own set of advantages. If you have decided to take the plunge to have your private limited company converted to a public limited company, read on to find out how you can do so.

Our experienced corporate secretaries in Singapore can assist you with the process if you have further questions. Meanwhile, we hope this article can help you understand the process better.

What Are the Main Features of a Public Limited Company?

While the public limited company structure shares some similarities with the private limited company structure, its features make it more ideal for large businesses. Its main features include:

  • Shareholders: A public limited company requires at least 50 shareholders, making it ideal for large businesses
  • Public: Unlike a private limited company, a public limited company can offer shares to the general public when it goes listed
  • Regulations: A public limited company will be put under more rigid accounting and reporting rules due to its nature

As with the private limited company structure, a public limited company will also be required to have a registered office in Singapore.

What’s the Difference Between a Private Limited Company vs Public Limited Company

Private limited company Public limited company
Privately held for small businesses and has a maximum of 50 shareholder Publicly held and has more than 50 shareholders
Liability of members of private limited company is limited to the number of shares respectively owned by them Perceived as a separate entity from its directors or founders and has legal capacity. Shareholders also have limited liability
The shares of a private limited company cannot be traded publicly The shares of a private limited company can be traded publicly if it goes listed

Why Should Anyone Convert Their Private Limited Company to a Public Limited Company?

Advantages

Your private limited company will have to be converted to a public limited company when there are more than 50 shareholders. Converting to a public limited company and getting listed comes with the following advantages:

Your private limited company will have to be converted to a public limited company when there are more than 50 shareholders. Converting to a public limited company and getting listed comes with the following advantages:

  1. Unlock and maximise long-term shareholder value

The conversion of private limited company to public company best demonstrates the brand's real value in the market and offers the original shareholders a significant Return on Investment (ROI).

  1. Liquidity

Stockholders of a registered private limited company's stock have to look for investors who are willing to buy its shares. On the other hand, stockholders of a public limited company will have an open niche market in which sellers and buyers can interact and do business.

  1. Compensation

In Singapore, companies that are publicly listed can give securities to their directors, officers and employees as a form of compensation. The market value of the securities is determined by its stock exchange selling price.

Disadvantages

While converting a private limited company to a public listed company comes with advantages, there are also some disadvantages, including:

  • It is not cheap to set up
  • There are more stringent accounting and reporting requirements
  • There is a higher possibility of a hostile takeover by a competitor, since the company is unable to control the buyers of its shares
  • Shareholders will expect a percentage of the profits as their dividends
  • Shareholders may have differing opinions when it comes to decision making for the business

What Is the Procedure Like for Converting Private Limited Company to Public Limited Company

Step 1: Engage a lawyer

You will need to engage your lawyer to draft out a Statement in lieu of Prospectus.

Step 2: Pass shareholders’ resolution

Osome Pte. Ltd. will then pass Shareholders’ resolution (Special resolution) for the following agenda:

  • To convert the private limited company to public limited company
  • To change the company name to Osome Ltd.
  • To adopt the Statement in lieu of Prospectus
  • To adopt a new set of Constitution (for Public Limited Company)

Step 3: Lodge shareholders’ resolution

You will then have to lodge the passed Shareholders’ resolutions with Accounting and Corporate Regulatory Authority (ACRA)

Step 4: Notice of incorporation

ACRA will issue a notice of incorporation.

Step 5: Lodge another lodgement

Lodge another lodgement (a list of persons holding shares in the company) with the ACRA within 14 days after the issuance of the notice of incorporation.

What Happens After Conversion?

Changing your company structure to a public limited company is not your company's final destination, but just the first step in a new journey. After conversion, your company is also expected to:

Set up an audit committee

Under the Singapore Companies Act, all public listed limited company in Singapore are required to have an audit committee, made up of board members of an independent majority and are not affiliated with an executive director or executive directors. The role of the audit committee is to uphold the integrity of your company’s financial statements and any announcements about the financial performance of your company.

What a Public Limited Company Needs To Do To Stay Compliant

  1. Register a Prospectus

A public limited company has to adhere to more complicated regulatory principles in comparison to a private limited company. For a start, a public limited company has to register a prospectus with the Money Authority of Singapore (MAS), with the following information:

  • Reports
  • Risk factors
  • Tax issues
  • Investment objectives and policies
  • Share classes
  • Structure of the business and its history
  • Company's directory, management, and administration
  1. Secure special permits and licenses

If your public limited company is activating in business sectors including hotels, food services businesses, land transport services, animal and veterinary services, education centres and the like, you are required to apply and obtain special permits and licenses to operate in these regulated types of services.

  1. Hold annual shareholders’ meeting

Public limited companies in Singapore are required to hold an annual shareholders’ meeting to present their accounts to its members and allow them to raise questions about the business’s financial situation. The date of the shareholders’ meeting will be dependent on your company’s financial year end.

Stay on Top of Administration Work

Converting your private limited company to a public limited company involves heavy investment of resources and is a long-term commitment, but we’ve got your back. We know how busy you are, and we can help you sort out your accounting tasks in Singapore so you can concentrate on the core business at hand.

We’ll take over your invoices, receipts, and bank statements in any format. We then sort, match them and prepare reports to ensure your company always stays compliant. Drop us a message today!

Share this post:

Tips to run your business smarter.
Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

You might like it

NewCampus Manages Documents Worry-Free With Osome’s Corporate Secretary
Seller Spotlight

NewCampus Manages Documents Worry-Free With Osome’s Corporate Secretary

New Campus had set up its operations in Dubai for around 5 years, working with a traditional company secretary company. When they wanted to set up their company in Singapore, venture capital fund 500 startups recommended that they try Osome.

Ajay Experiences Paper-free Accounting for his Startup Tinvio
Seller Spotlight

Ajay Experiences Paper-free Accounting for his Startup Tinvio

When Tinvio started operations to build a communication and commerce platform for merchants and suppliers, they were looking for an annual corporate secretary and monthly accounting service so that they could focus on growing their business while upholding corporate diligence.

How Does Fulfillment and Storage Impact Your Bottom Line?
E-commerce

How Does Fulfillment and Storage Impact Your Bottom Line?

So, you have reached a turning point in your company’s growth and feel like you need to focus more on order processing and fulfillment. That’s great because that will allow you to grow your sales.

An E-Commerce Seller's Introduction to Currency Risk
E-commerce

An E-Commerce Seller's Introduction to Currency Risk

If you trade in a stronger currency, you will have to pay more for fewer items, which can squeeze your profit margins and make competing with other businesses difficult for you. It can also affect your ability to make profitable investment opportunities.

This is How Amazon's Supply Chain Works
E-commerce

This is How Amazon's Supply Chain Works

In order for Amazon to run at full capacity, a wide range of functions must work together. Because of this, Amazon's supply chain plays such an important role in its success and operation.

A Guide to Choosing Your E-commerce Store Name
E-commerce

A Guide to Choosing Your E-commerce Store Name

Choosing a good brand name once you have registered your company is important for an e-commerce business store because it will grow to be the brand that users identify with.

How To Choose the Perfect Domain Name for E-commerce
E-commerce

How To Choose the Perfect Domain Name for E-commerce

A domain name is an identity and at the same time, the address for customers to get to e-commerce businesses’ stores online. Thus, choosing the perfect domain name is important for your e-commerce business.

Why You Should Protect Yourself As You Build Your Business
Running My Business

Why You Should Protect Yourself As You Build Your Business

Despite the measures that the Government had implemented to assist in holding back retrenchments and offsetting employees’ wages, the pandemic and its impact are enduring. All the more reasons for you to get insurance now.

13 Best Co-Working Offices in Singapore
Entrepreneur's Bootcamp

13 Best Co-Working Offices in Singapore

Trying to beat the work-from-home slump? Give your productivity a much-needed booster at an amazing co-working space of your choice. From stunning views, amenities, to convenient central locations, you’d surely find a space to get your inspiration flowing.

Understanding Customer Lifetime Value for Online Sellers
Running My Business

Understanding Customer Lifetime Value for Online Sellers

Once you establish a customer lifetime value, you'll realize that acquiring a new client is much more costly and time-consuming than selling to existing clients.

A Guide to Calculating Taxes for Freelancers and Self-Employed
Tax

A Guide to Calculating Taxes for Freelancers and Self-Employed

During tax season, it can get increasingly frustrating or confusing for freelancers and self-employed people as they are not clear about their tax obligations.

Retailers and Food Businesses To Get Government Support in Going Online
Running My Business

Retailers and Food Businesses To Get Government Support in Going Online

Food outlets and retail businesses in Singapore affected by COVID-19 Phase 2 (Heightened Alert) restrictions will get help to offset their F&B delivery costs and to sell on online platforms.

Tips to run your business smarter. Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

We’re using cookies! What does it mean?