Private limited companies are a dime a dozen, but every private limited company, at some point, wishes to turn public so as to increase scalability. The question generally put across is, “Why go public?” The answer lies in certain distinct differences that arise between private limited companies and public limited companies.

• Public companies offer the option of Initial Public Offering (IPO). Here, by going public, the company is offering its shares to the general public.
• The option of IPO thereby removes the restriction on the transferability of shares, which is a feature of private limited companies.
• There is no cap with regards to the maximum number of members in a public limited company, thereby allowing them to raise and gain easy access to funding. Therefore, growth and flexibility are ideally the reasons for the switch from private to public.

In Nepal as of Companies Act, 2063 (2006)

Section 13 : Conversion of  company into public company

1) In the following circumstances, a private company shall be converted into a public company under this section:

a) If the general meeting of the private company, by adopting a special resolution, decides to convert that company into a public company,

Provided, however, that no private company shall be capable of being converted into a public company unless and until it fulfills the requirements to be fulfilled under this Act for being a public company.

b) If twenty five percent or more of the shares of a private company are subscribed by one or more than one public company,

Provided, however, that in computing the percentage as referred to in this Clause, the share passed by any banking or financial company as a trustee shall not be calculated.

c) If a private company subscribes twenty five percent or more of the shares of a public company.

2) In the circumstances as refer to in Clause (a) of Sub-section (1), the concerned private company, shall for being converted into a public company, make an application as prescribed, accompanied by a copy of the resolution mentioned in that Clause and by the fees as prescribed , to the office within thirty days after the date of such resolution.

3) On receipt of an application pursuant to Sub-station (2), the office shall, if the concerned private company has fulfilled the necessary requirements for carrying on transactions as a public company, mention in the company register the contents of conversion of such company into a public company and give a company conversion certificates as prescribed within sixty days.

4) If any private company has to be converted into a public company owing into the circumstances referred to in Clause (b) or (c) of Sub-section (1), the concerned private company shall make an application, as prescribed, setting out all details, accompanied by the fees as prescribed, to the Office for being converted into a public company within seven days after the date of occurrence of such circumstances.

5) On receipt of an application pursuant to Sub-section(4), the Office shall, if such company has fulfilled the requirements to be fulfilled by a public company under this Act to carry on transactions, mention in the company register the contents of conversion of company into a public company and give a company conversion certificate as prescribed.

6) If private company is converted into a public company pursuant to this Section, any subsidiary company of that company, as well, shall, ipso facto be deemed to have been converted into a public company in the same date.

7) In the event of conversion into a public company pursuant to Sub-section (6), it shall be the obligation of the concerned company to make an application, accompanied by the required documents, to the Office to get recorded in the company register the contents of conversion of such subsidiary company into a public company and obtain the certificate.

8) In the event of conversion of any private company into a public company pursuant to this Section, the provisions applicable to the public company under this Act shall be deemed to be, ipso facto, applicable to that company after the date of such conversion.

9) In the event of conversion of any private company into a public company pursuant to this Section, all the assets and liabilities of the private company so converted shall devolve on the successor company.