Changing Company Status Between Private Limited and Public

A company that starts out as a Sendirian Berhad (private limited company) is not locked into that status forever. When a business aspires to raise funds from the public or to list its shares, it can convert into a public company (Berhad) — and the reverse path is open too. The key is a single special resolution and a single filing with SSM.

Which sections govern these conversions?

The conversion of the status of a company limited by shares is governed by section 41 of the Companies Act 2016:

• Section 41(1) — conversion of a public company to a private one.
• Section 41(2) — conversion of a private company to a public one.

(Section 40(1), meanwhile, governs the conversion of an unlimited company into a limited company, a separate process.)

In both directions, the first step is for the company to pass a special resolution. Under section 292 of the Companies Act 2016, a special resolution requires the support of at least 75% of the members entitled to vote. An ordinary resolution (simple majority) is not sufficient for these conversions.

What documents must be filed with SSM?

The set of documents differs according to the direction of conversion.

Conversion	Documents to be filed
Public → Private (s.41(1))	Notice of conversion by special resolution (stating an appropriate change of name); RM500 fee; original copy of the notice of registration / certificate of incorporation
Private → Public (s.41(2))	Notice of conversion by special resolution (change of name + compliance with the removal of private company restrictions under s.43); statement in lieu of prospectus (Second Schedule, s.189); statutory declaration confirming compliance with paragraph 190(2)(b); RM500 fee; original copy of the notice of registration / certificate of incorporation

Note that the private-to-public conversion demands more documents. This is because a public company can offer shares to the public, so the law requires additional disclosure — a statement in lieu of prospectus and a statutory declaration — before the new status is granted.

When does the conversion take effect?

According to SSM guidelines, once the procedure has been complied with and the complete documents have been submitted:

1. For private-to-public conversion, SSM will issue the notice of conversion to a public company within one working day. The SSM guidelines do not state any specific timeframe for public-to-private conversion.
2. The original notice of registration or certificate of incorporation will be cancelled.
3. A certificate of conversion may be obtained from SSM on request upon payment of the prescribed fee.

The conversion takes effect when the notice of conversion is issued by the Registrar — not on the date the special resolution was passed.

Can a conversion be reversed?

There is one limit clearly stated in the law. Under section 42(6), a private company that has become public automatically through section 42(5) — for example, because of the number of members or particular circumstances — cannot revert to a private company without the leave of the Court.

Apart from this restriction, the guidelines and sources referred to do not specifically set out the procedure or conditions for a company to voluntarily change its status back. Therefore, if a re-conversion is being considered, the company should first obtain confirmation from SSM and the advice of a qualified company secretary.

What’s next

Before passing the resolution, ensure the company secretary confirms that the constitution and the company name have been adjusted (for example changing “Sdn Bhd” to “Bhd”). For a conversion into a public company, prepare the statement in lieu of prospectus and the statutory declaration early, as both must be filed together with the notice of conversion. Refer to the official SSM guidelines and obtain the advice of a qualified company secretary to ensure every condition under section 43 is met before filing.