A private company can convert into a public company by satisfying the conditions in the Companies Act, passing the required corporate decision, amending its constitutional documents and obtaining a conversion certificate from OCR.
Legal effect
Once conversion takes effect, the provisions applicable to public companies apply to the converted company. The company’s existing assets and liabilities continue with the converted entity.
Additional requirement
A company converted to public status cannot assume that conversion alone authorizes it to commence every public-company activity. The Act separately requires approval to commence business in circumstances where such approval is applicable.
Preparation
Before conversion, a company should review:
- minimum capital requirements;
- shareholder numbers;
- board composition;
- governance requirements;
- audit requirements;
- securities-law implications;
- sector-specific regulation.