How to Convert LTD to PLC in Nigeria

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How to Convert LTD to PLC in Nigeria – An Update

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Nigerian companies re regulated by the Companies and Allied Matters Act (CAMA). In CAMA are various kinds of companies available in Part A. As a matter of fact, these re those limited by shares, guarantee or unlimited and may be a private or public company. How to Convert LTD to PLC in Nigeria – An Update is an addendum to our previous article on how to convert from one business status to another. Get, How to Convert LTD to PLC in Nigeria, here.

How to Convert LTD to PLC in Nigeria – An Update

Indeed, companies re basically the most popular and widely used business organisations in our world today. Therefore, they re highly organized and regulated by laid down statutes in all jurisdictions. Incidentally, the following kinds of companies exist:

Private company limited by shares – (LTD), Public company limited by shares – (PLC), Unlimited company – (UNLTD) andCompany limited by guarantee – (LTD/GTE).

How to Convert LTD to PLC in Nigeria – An Update

On the other hand, any company registered as one of the forms listed above can subsequently change its status to another type. That’s if the need arises. Therefore, provided that the laid down rules and procedures under the Act re followed, changes can be made.

This means, the company can change its status without having to incorporate a new company. This involves taken appropriate procedural steps and submitting the relevant documents required to Corporate Affairs Commission (CAC). Therefrom, CAC will grant the company a new certificate of incorporation showing the new status of the company.

How to Convert LTD to PLC in Nigeria – An Update

As a matter of fact, the most common types of conversion or re-registration of companies in Nigeria re those for:

Re-registration of private company( LTD) to public company PLC.
And, conversion of public company to private company (PLC to LTD)
Re-registration of private company limited by shares to unlimited company (LTD to UNLTD)
Re-registration of unlimited company to private company limited by shares (UNLTD to LTD)

How to Convert LTD to PLC in Nigeria – An Update

Conversion or Re-registration of private company to public company (LTD – PLC), is the most common type of conversion. The procedure’s laid down in section 50 of CAMA. A private company converts to a public company with a Special Resolution passed by the board of directors. Consequentially, the Memorandum and Articles of Association re altered. Thi ‘s completed once CAC grants its approval.

How to Convert LTD to PLC in Nigeria – An Update – Conversion Procedure:

The procedures are as follows:

A board resolution proposing the conversion and re-registration from LTD to PLC.
Company secretary issues notice of General Meeting to pass special resolution.
A general meeting’s convened. Here special resolution’s passed that company be a public company.

In this connection, changes’ll ar done as follows:

Company’s name changed to Plc in the Memo and Articles of the company.
Retraction on share transfer and invitation of the public for shares in the Articles removed.
Amendment on appointment of directors and company secretary to conform to the requirement of Plc in the Articles.

How to Convert LTD to PLC in Nigeria – An Update – Formal Application:

Application must be made by CAC prescribed form. This’s signed by at least one director and secretary with following accompanying documents:

Special resolution of the general meeting.
Printed copy of the altered Memorandum and Articles of Association. This must reflects the provision required under CAMA for public company.
A written statement certified under oath by the directors and secretary asserting that the paid up capital as at the date of the application is not less than 25% of the authorised capital.
The company’s Balance Sheet as at the date of the resolution or the preceding 6 months, whichever is later.

Furthermore,

The statutory declaration of director and secretary to the effect that the special resolution has been passed. Also showing that the company’s assets are not less than the aggregate of the paid up capital and un-distributable reserves.
A copy of prospectus or statements in lieu of prospects delivered within the preceding 12 months to the Securities and Exchange Commission for registration. That is, in the event that the company being converted is going to be quoted at stock Exchange.

Documents to submit to CAC:

As a matter of fact, for conversion from LTD to PLC the following documents should be brought to CAC.

Name Availability check and reservations (Form CAC1)
Special resolution for the conversion, signed by at least one director and the secretary.
An application in a prescribed form for conversion and registration, signed by at least one director and the secretary.
Copy of amended Memorandum and Articles of Association
Original receipt of filing fees.
Evidence of filing of Annual Returns to date.

Satisfactory Requirements:

Once CAC confirms your documents satisfactory, it retains the documents and issues a new certificate of incorporation as a public company. It then issues to you the Certified True Copies (CTC) of the documents filed at the CAC for record purposes.

How to Convert LTD to PLC in Nigeria – An Update – Prohibited Conversion:

Furthermore, certain company or business conversion re prohibited. Therefore, will not be approved by CAC.

An unlimited company can’t turn back to be a public company. This’s because public can’t be exposed to unlimited liability of such company. In the sense that by subscription to shares of an unlimited company – the public takes up such large responsibility. This’s why unlimited company is prohibited from re-registering as public company.

In addition, unlimited company can’t be converte a company limited by guarantee.

In addition, a company originally registered as unlimited and later re-registered to limited status (LTD) – cannot re-register back to its original status as unlimited (UNLTD).

Furthermore, a private company (LTD) previously registered as unlimited company (UNLTD) – can’t convert to another status any more. This means that it cannot leave the unlimited status and return to its previous limited status (LTD) or to a public company (PLC) any more.

In fact, a public limited company (PLC) which converts to LTD and then to UNLTD, cannot re-register again. It has to remain as UNLTD.

GET YOUR CONVERSIONS HERE:

As a matter of fact, this is simple. Contact us today for processing of your compny conversion. We will take it up from there. As CAC accredited agents, we will ensure you have the best services. If you ned more information on this website concerning your business incorporation click HERE.

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Ane

Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.