conversion of pvt. co into public co.
This query is : Resolved
09 February 2010
procedure for conversion of private co. into public co.?
09 February 2010
Procedure
1. Convene a board meeting and decide the time, date, place and agenda for the general meeting to approve the draft notice of the general meeting to alter the Articles of Assocition and change the Objects clause as well in the Memorandum of Association along with the Articles of Association and consequntly the name by passing a special resolution.
2. Send 21 days clear notice of the general meeting in writing to all the eligible members of the company, attach along with the notice suitable explanatory statement for the proposed special resolutions.
3. Take a decision in the aforesaid board meeting with regard to increasing the paid up capital of the company to Rs. 5 lakhs if the existing capital is less than Rs. 5 lakhs or such higher amount as may be prescribed. Such increase is not required if the existing private limited company is registered under Section 25 of the Act.
4. In the general meeting pass a special resolution for deletion of the restrictive conditions of section 3(1)(iii) from its articles and for deletion of the word `Private' from the name of the company.
5. File minutes of the meeting in the minutes book within 30 days of the conclusion of the meeting.
6. File Form No. 23 within 30 days of passing a special resolution with the Registrar of Companies with requisite fees prescribed under Schedul X of the Act.
7. File within 30 days of passing of the above special resolution , the prospectus in the form as per Schedule II or the statement in lieu of prospectus in the form as per Schedule IV , with the Registrar, alongwith the filing fee.
8. Make an application to the Registrar of Companies for issue of a fresh certificate of incorporation with the changed name.
9. Appropriate alterations will be made by the Registrar in the Memorandum of Association of the company immediately after issuin of fresh certificate of incorporation.
11. Increase the number of directors from 2 to 3 and number of members to 7 in case the number of directors is less than 3 and mebers is less than 7.
12. Amend the Articles of Association in relation to quorum for general meeting, period of notice required for general meetings, and mode of appointment/retirement by rotation of the director, etc. bypassing a special resolution. File a copy of the amended Articles with the Registrar of Companies.
13. It is not required to obtain certificate of commencement of business in case of conversion of private company into public.
14. Hold a statutory meeting if the conversion is within 6 months of the incorporation of the company and comply with all the proisions with regard to holding of statutory meeting.
15. No consent is required to be obtained from the existing directors to act as such after conversion, such consent is however is required for the subsequent appointment(s).
16. The change of name on conversion will not affect any rights or obligations of the company and any legal proceedings by or agaist the company which was commenced in its former name, can be continued under its new name.
Documentation
1. Application to the Registrar of Companies for issue of fresh certificate of incorporation.
2. Board Resolution for conversion of the company into a public company.
3. Special Resolution for conversion of the company into a public company.
4. FORM 23 regarding Registration of resolution(s) and agreement(s)
1. Convene a board meeting and decide the time, date, place and agenda for the general meeting to approve the draft notice of the general meeting to alter the Articles of Assocition and change the Objects clause as well in the Memorandum of Association along with the Articles of Association and consequntly the name by passing a special resolution.
2. Send 21 days clear notice of the general meeting in writing to all the eligible members of the company, attach along with the notice suitable explanatory statement for the proposed special resolutions.
3. Take a decision in the aforesaid board meeting with regard to increasing the paid up capital of the company to Rs. 5 lakhs if the existing capital is less than Rs. 5 lakhs or such higher amount as may be prescribed. Such increase is not required if the existing private limited company is registered under Section 25 of the Act.
4. In the general meeting pass a special resolution for deletion of the restrictive conditions of section 3(1)(iii) from its articles and for deletion of the word `Private' from the name of the company.
5. File minutes of the meeting in the minutes book within 30 days of the conclusion of the meeting.
6. File Form No. 23 within 30 days of passing a special resolution with the Registrar of Companies with requisite fees prescribed under Schedul X of the Act.
7. File within 30 days of passing of the above special resolution , the prospectus in the form as per Schedule II or the statement in lieu of prospectus in the form as per Schedule IV , with the Registrar, alongwith the filing fee.
8. Make an application to the Registrar of Companies for issue of a fresh certificate of incorporation with the changed name.
9. Appropriate alterations will be made by the Registrar in the Memorandum of Association of the company immediately after issuin of fresh certificate of incorporation.
11. Increase the number of directors from 2 to 3 and number of members to 7 in case the number of directors is less than 3 and mebers is less than 7.
12. Amend the Articles of Association in relation to quorum for general meeting, period of notice required for general meetings, and mode of appointment/retirement by rotation of the director, etc. bypassing a special resolution. File a copy of the amended Articles with the Registrar of Companies.
13. It is not required to obtain certificate of commencement of business in case of conversion of private company into public.
14. Hold a statutory meeting if the conversion is within 6 months of the incorporation of the company and comply with all the proisions with regard to holding of statutory meeting.
15. No consent is required to be obtained from the existing directors to act as such after conversion, such consent is however is required for the subsequent appointment(s).
16. The change of name on conversion will not affect any rights or obligations of the company and any legal proceedings by or agaist the company which was commenced in its former name, can be continued under its new name.
Documentation
1. Application to the Registrar of Companies for issue of fresh certificate of incorporation.
2. Board Resolution for conversion of the company into a public company.
3. Special Resolution for conversion of the company into a public company.
4. FORM 23 regarding Registration of resolution(s) and agreement(s)
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09 February 2010
A private limited company, if it desires to convert itself into a public limited company, will have
to follow the under-mentioned procedure:
(1) It should take the necessary decision in its board meeting and fix up the time, place and
agenda for convening a general meeting to alter the articles of association and
consequently the name by a special resolution as well as to alter by special resolution
the “objects clause†of the memorandum subject to the confirmation of the Company Law
Board under Section 17 and by ordinary resolution the share capital clause under Section
94 if the alteration of share capital is involved in the process.
(2) The company has to see that any change in the articles confirms to the provisions of the
Companies Act [Section 31(1)]; also to see that such change does not increase the
liability of any member who had become the member before the alteration.
(3) It must issue notices for the general meeting in order to pass there at the special
resolutions together with the explanatory statements for the alteration of the articles and
the memorandum.
(4) It will have to convene the general meeting in order to pass there at the special
resolution (i) for the purpose of the alteration of the memorandum and article of
association; and (ii) also for the purpose of deleting those articles which are required to
be included in the articles of a private company only [Section 3(1)(iii)]. Such other articles
which do not apply to a public company should be deleted and those which apply should
be inserted. Consequent upon the above changes, it will have to delete the word “privateâ€
from its name [Section 21].
(5) It shall file either the prospectus in the Form prescribed under Schedule II or the
statement in lieu of prospectus in the form prescribed under Schedule IV within 30 days
of the passing of the resolution mentioned in (4) above in the manner stated in Section
44.
The aforesaid prospectus or the statement in lieu of the prospectus must be in conformity
with Parts I and II of Schedule II or with Parts I and II of Schedule IV respectively.
(6) In the matter of the prospectus or the statement in lieu of the prospectus the company
has to adopt abundant caution against any untrue statement being included therein,
because inclusion of untrue statement will attract penalty by virtue of Section 44(4). It
may be noted that a statement included in a prospectus or statement in lieu of
prospectus shall be deemed to be untrue if it is misleading in the form and context in
which it is included. Likewise, where the omission from prospectus or a statement in lieu
of prospectus of any matter is calculated to mislead, it shall be deemed, in respect of such omission, to be a prospectus or a statement in lieu of prospectus in which an untrue
statement is included.
(7) It shall file with the concerned stock exchange 6 copies of such amendments on both
articles and memorandum, one of which must be a certified copy.
(8) It shall file with the Registrar the said special resolution together with the explanatory
statement within 30 days of their passing [Section 192].
(9) It must take some of the steps regarding further issue of capital under Section 81 which
are not in common with the steps discussed in relation to further issue of shares.
(10) The company has to apply to the Registrar for the issue of a fresh certificate of
incorporation for the changed name, namely, the existing name with the word “privateâ€
deleted. On issue of such certificate shall the name of the converted company be final
and complete [Section 23].
A private limited company, if it desires to convert itself into a public limited company, will have
to follow the under-mentioned procedure:
(1) It should take the necessary decision in its board meeting and fix up the time, place and
agenda for convening a general meeting to alter the articles of association and
consequently the name by a special resolution as well as to alter by special resolution
the “objects clause†of the memorandum subject to the confirmation of the Company Law
Board under Section 17 and by ordinary resolution the share capital clause under Section
94 if the alteration of share capital is involved in the process.
(2) The company has to see that any change in the articles confirms to the provisions of the
Companies Act [Section 31(1)]; also to see that such change does not increase the
liability of any member who had become the member before the alteration.
(3) It must issue notices for the general meeting in order to pass there at the special
resolutions together with the explanatory statements for the alteration of the articles and
the memorandum.
(4) It will have to convene the general meeting in order to pass there at the special
resolution (i) for the purpose of the alteration of the memorandum and article of
association; and (ii) also for the purpose of deleting those articles which are required to
be included in the articles of a private company only [Section 3(1)(iii)]. Such other articles
which do not apply to a public company should be deleted and those which apply should
be inserted. Consequent upon the above changes, it will have to delete the word “privateâ€
from its name [Section 21].
(5) It shall file either the prospectus in the Form prescribed under Schedule II or the
statement in lieu of prospectus in the form prescribed under Schedule IV within 30 days
of the passing of the resolution mentioned in (4) above in the manner stated in Section
44.
The aforesaid prospectus or the statement in lieu of the prospectus must be in conformity
with Parts I and II of Schedule II or with Parts I and II of Schedule IV respectively.
(6) In the matter of the prospectus or the statement in lieu of the prospectus the company
has to adopt abundant caution against any untrue statement being included therein,
because inclusion of untrue statement will attract penalty by virtue of Section 44(4). It
may be noted that a statement included in a prospectus or statement in lieu of
prospectus shall be deemed to be untrue if it is misleading in the form and context in
which it is included. Likewise, where the omission from prospectus or a statement in lieu
of prospectus of any matter is calculated to mislead, it shall be deemed, in respect of such omission, to be a prospectus or a statement in lieu of prospectus in which an untrue
statement is included.
(7) It shall file with the concerned stock exchange 6 copies of such amendments on both
articles and memorandum, one of which must be a certified copy.
(8) It shall file with the Registrar the said special resolution together with the explanatory
statement within 30 days of their passing [Section 192].
(9) It must take some of the steps regarding further issue of capital under Section 81 which
are not in common with the steps discussed in relation to further issue of shares.
(10) The company has to apply to the Registrar for the issue of a fresh certificate of
incorporation for the changed name, namely, the existing name with the word “privateâ€
deleted. On issue of such certificate shall the name of the converted company be final
and complete [Section 23].
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