conversion of public limited to private limited.

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Querist : Anonymous

Querist : Anonymous (Querist)

08 August 2010 can anyone give me the detail procedure to convert public limited into private limited

CA Sanat Pyne

CA Sanat Pyne (Expert)
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08 August 2010 Under section 31 of the Companies Act, 1956, any alteration made in the Articles which has the effect of converting a public company into a private company shall not have effect unless such alteration has been approved by the Central Government (powers delegated to the Registrar of Companies). The following actions are required to be taken in respect of conversion of a public company into private company:—
(i) The Board of directors of the public company shall consider the proposal of conversion at a meeting and would resolve by means of a resolution that subject to necessary approvals under section 31, the company shall be converted into a private limited company and will include the word "Private" before the word "Limited" in its name (Specimen of Board Resolution given in Appendix 3);
(ii) Confirm that the numbers of members are not exceeding fifty;
(iii) Give notice in newspapers once in English and local language, where the registered office of the company is situated for conversion of company into private limited for providing opportunity to raise objections, if any, before the Registrar with a copy to the company within a period of 21 days from the date of notice and a copy of the notice be produced before the Registrar alongwith the application (Specimen of the notice has been given in Appendix 3A);
(iv) Give notice to all the creditors having secured or unsecured liabilities in excess of Rs.1.00 Lacs by Registered post and proof of delivery of such notice is required to be produced before the Registrar alongwith the application;
(v) The Board of directors will authorise calling a general meeting of members by giving notice of at least 25 days before the meeting and will also approve draft notice to be sent to the members enclosing with the Explanatory statement under section 172 of Companies Act, 1956;
(vi) The Board of directors will authorise a director and/or the secretary to move an application to the concerned Registrar of Companies for approval after the proposal of conversion in approved at the general meeting of the shareholders by means of a special resolution (Specimen of Special Resolutions given in Appendix 4);
(vii) Certified copy of the special resolution along with Explanatory Statements and amended copy of the Memorandum and Articles shall be filed with the Registrar of Companies within 30 days of passing of the resolution in terms of section 192 in e-Form 23;
(viii) Make an application in e-Form 1B to the Registrar of Companies concerned, attaching all enclosures required with the application and also fee prescribed under Companies (Fees on Applications) Rules, 1999 as amended;
(ix) Apply to the Registrar of Companies for providing a fresh certificate of incorporation consequent upon conversion of a public company into private company;
(x) Change the name in all documents of the company by inserting "Private" before the word "Limited".