Can a Proprietorship or Partnership Firm bring SME IPO?

This IPO News guide/article covers “Can a Proprietorship or Partnership Firm bring SME IPO?”. The page is organized around 1. convert proprietorship/partnership to a public limited company, 2. conversion doesn’t mean you are ready for sme ipo. do pre-ipo readiness assessment, 3. proprietorship/partnership firms must have three years of track record, 4. profitability criteria for proprietorship and partnership firms, 5. net worth requirements for proprietary firms and partnership. The source record was published on \",\"Thursday, August 22, 2024\",\". IPO News presents the structured facts and tables in its own layout and wording.

Topics Covered

• 1. Convert proprietorship/partnership to a Public Limited Company
• 2. Conversion doesn’t mean You are ready for SME IPO. Do Pre-IPO Readiness Assessment
• 3. Proprietorship/Partnership Firms must have three Years of Track Record
• 4. Profitability Criteria for Proprietorship and Partnership Firms
• 5. Net Worth requirements for proprietary firms and partnership
• 6. Comply with Other Regulatory Requirements
• SME IPO Enquiry
• Frequently Asked Questions
• 1. Can a proprietary or partnership firm list on SME platform?−
• 2. Is it mandatory for proprietorship and partnership firm to convert into a public limited company for SME IPO?+
• 3. What happen after proprietorship and partnership firms being converted into a public limited company?+
• 4. How to convert proprietorship/ partnership firms into a Public limited company?+
• 5. What are the key SME exchange listing criteria for proprietorship or partnership firms?+
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Key Facts

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• The minimum authorized capital required for the conversion is Rs 1 lakh.
• The minimum paid-up capital required for conversion is Rs 5 lakh.
• The company must have at least 7 shareholders for conversion into a PLC.
• A minimum of 3 directors are necessary.
• The conversion process may take nearly 1.5 to 2 months.
• Must have fully audited financial results for the last 3 years.
• Capital restructuring may be required, as the company’s post-issue paid-up capital cannot exceed Rs 25 crore for SME IPO.
• Check 10 Key factors before planning an SME IPO
• BSE and NSE SME exchange eligibility criteria clearly state that any company desirous of listing must have at least 3 years of operational track record.
• Proprietorship and partnership firms seeking listing on the BSE SME platform must have Rs 1 crore of minimum net worth in 2 preceding full financial years.
• When a public limited company intends to bring IPO and is subject to conversion of proprietorship/partnership or LLP, these companies must have Rs 1 crore of net worth for 2 preceding financial years.
• The company must have at least 25% public shareholding.
• 100% of the company’s shares must be in dematerialized form.
• Also, proprietors have to maintain at least 50% ownership in the company.
• File form -1 to check the company name availability, you cannot register with an already existing name.
• File form MGT – 14 and form INC-27 to RoC with copies of resolution, altered MoA, altered AoA, meeting minutes, etc.
• Post-issue paid-up capital should not exceed Rs 25 crore.
• Minimum 3 years of operational track record not as a company but overall.
• The business must report minimum Rs 1 crore operating profit in any 2 out of 3 financial years
• Proprietary or partnership firms seeking listing on NSE SME should have positive net worth, or for BSE SME listing, a minimum of Rs 1 crore net worth for the last 2 financial year is mandatory.
• 10 Key Things to be Considered by SME Promoters before going public via SME IPO

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