Re-registering a private limited company to a public limited company

Discussion in 'Legal, Insurance, Employment and Health & Safety' started by VladimirsHromakovs, Feb 14, 2018.

  1. VladimirsHromakovs

    VladimirsHromakovs

    Joined:
    Feb 14, 2018
    Messages:
    2
    Hello,

    I am going to register a private limited company and get the investment for 20% of my shares. When the assets grow I am going to re-register my company to a public limited company.

    How can I do that? What actions do I need to take?

    One of the ways I think is to register a fresh public limited company and buy all the shares from the first company. But what to do with the investors who already have 20% of the first company?

    Thank you,
    Vladimir.
  2. CL102

    CL102

    Joined:
    Oct 11, 2015
    Messages:
    15
    The fresh PLC would pay all the shareholders to buy their shares out. Fresh PLC can pay in cash or pay in its own shares. The 20% shareholders will get 20% of the cash or shares being issued by Fresh PLC. I'm sorry I don't quite understand your question.

    When you own 80% of the shares of the LTD company and others own 20%...it's a simple enough structure. It doesn't get simpler than that. When the LTD is bought (or liquidated) you get 80% and they get 20%. Isn't that obvious or am I missing something?
  3. VladimirsHromakovs

    VladimirsHromakovs

    Joined:
    Feb 14, 2018
    Messages:
    2
    Thank you for the answer.
    I understood everything.

    Now I just have a new question.

    "PLCs must also be incorporated with Companies House and form a constitution (ie by adopting Articles of Association and Memorandum of Association). Additionally, they must have a minimum allotted share capital of £50,000 (with at least least 25% being fully paid up) and this needs to be reflected in a Certificate for Commencement of Trading, obtained from Companies House".

    I don't understand this bit: "(with at least least 25% being fully paid up)".
    How can shares be paid?
    Paid to whom?
    Paid by who?
    Paid before or after placing them on the stock market?

    Thanks.
  4. CL102

    CL102

    Joined:
    Oct 11, 2015
    Messages:
    15
    Paid to the company :)

    Let me explain it with an example: You create a company and decide that there are going to be 100 shares worth £1 each i.e. if anyone wants to buy 1% of your company they'll have to pay £1.

    Now you allocate all 100 of the shares to your own name but you put only £60 into your company's bank account to pay for the shares. Now 60% of your shares have been fully paid up. You still owe the company £40 to take it up to your alloted share capital of £100.

    I don't know why you mention stock market. A PLC has nothing to do with the stock market. If you ever want to list your business on the stock market you go for what's called an IPO. It's a huge and expensive operation (costing a few hundred thousand pounds) and mired in regulatory red tape. When you list on the stock market you sell a portion (or all) of your shares. Assuming you built the company up to a huge and profitable business you get, say, £10,000 for each share that originally costed you £1. Congratulations.

    (Oh, and don't forget to pay, even after Entrepreneurs' Relief, a huge capital gains tax on that big profit! ;) )
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