Conversion of Business Entities for CS Executive SBIL (Dec 2025 / June 2026)

Conversion of Business Entities CS Executive syllabus teaches students how a business can legally change its structure under Indian law. Sometimes, a company may want to expand or reduce its size, or switch to a different type of business form, such as from a private company to a public company or from a company to an LLP. This process involves following legal steps, filing required forms, and getting approvals. It helps students understand the legal impact of such conversions on ownership, management, and existing contracts or liabilities.

Conversion of Business Entities CS Executive Overview

Conversion of Business Entities CS Executive is about changing the type of a business from one legal form to another. For example, a private company can become a public company, a one-person company (OPC) can become a private company, or a private company can convert into an LLP. Here, students will learn the steps needed for conversion, like changing the documents of the company, getting approvals, and filing forms with the Registrar of Companies. They also study how debts, contracts, and ownership continue after conversion. Understanding this topic helps students guide businesses legally when their structure needs to change:

Conversion of Business Entities Legal Framework 

The fundamental authority for the conversion of a company from one type to another is granted by the Companies Act, 2013. Here is the brief review of the section 18 of Companies Act, 2013:

Section 18 of the Companies Act, 2013

Section 18 of the Companies Act, 2013, provides the statutory power and the framework for a company to convert itself into another type of company. This is an important provision to remember for this entire topic under CS Executive Corporate Law topics.

Conversion of Private Company into Public Company

When a private company converts into a public company, it sheds the restrictions and limitations placed on it by law. Hence, the conversion can enable it to raise capital from the public. The following table can be used to clear the minds of CS aspirants to learn what changes are made after the conversion of a private company into a public company:

Procedure for Conversion from Private to Public

The process for the conversion of a private company to public is initiated by the Board of Directors of the company. Then, it is completed after approval by the Registrar of Companies.

From here, candidates can learn about the procedure for conversion of private companies to public:

Benefits of Converting to a Public Company

CS candidates should be aware of the benefits of conversion of private enterprise to public company. It can help them to write answers in the CS executive exam properly. Here are some of the benefits of conversion to a public company:

• Free Transferability of Shares: Shares can now be freely transferred without restrictions.

• Greater Credibility: Public companies are subject to stricter regulatory compliance, enhancing public trust and reliability.

• Access to Public Capital: The company can invite the public to subscribe to its securities, allowing for greater capital raising.

• Expansion Scope: Conversion opens doors for larger-scale expansion and business growth.

• Stock Exchange Listing: The company can potentially list its shares on a stock exchange.

Conversion of Public Company into Private Company

The conversion of a public company into a private company is a more sensitive matter than the opposite. It involves imposing restrictions on the company where public funds were previously involved. As a result, this procedure requires the approval of both the Regional Director and ROC.

Changes Upon Conversion (Public to Private)

Candidates should be aware of the following changes after the conversion of a public company to a private one to cover Conversion of Business Entities CS Executive syllabus. Here are the important changes that are observed after this conversion:

• Number of Members: If the public company has more than 200 members, the number of members must be reduced to a maximum of 200.

• MOA and AOA: The documents must be altered to introduce the limitations, prohibitions, and restrictions (LPR clauses) required for a private company.

• Name: The company name must be changed to include the words "Private Limited".

Procedure for Conversion (Public to Private)

The initial steps for conversion to private form are similar to the reverse conversion. However, the further steps that involve the regional director are important in this procedure:

Summary of Forms and Timelines (CS Executive sample questions Conversion of Business Entities)

Candidates who are engaged in CS Executive programme should keep in mind the details of forms and timeline during the conversion process.

Post Conversion Requirements

After conversion, companies should confirm that their new legal status is reflected across all official and regulatory platforms. This is an important topic for CS Executive past questions Business Entities. 

Candidates can learn from here about the post-conversion requirements:

1. Fresh PAN Card: A change in name or status (Private to Public or vice versa) does not change the legal entity, hence the existing PAN remains the same. Obtaining a new PAN is illegal.

2. Update MOA and AOA: The altered copies of the Memorandum and Articles of Association must be updated and maintained everywhere.

3. Regulatory Updates: Inform the Income Tax Department, GST Department, and other concerned regulatory authorities about the change in company status.

4. Bank Account Details: The bank account details of the company must be updated to reflect the new name.

5. Official Stationery: Obtain a new rubber stamp, letterheads, and common seal (if applicable) bearing the updated company name.

6. Display of Names: As per the Companies Act, 2013 (Section 13(3)), the former name must be mentioned for a period of one year (not two years) from the date of conversion.