Conversion of Private Limited Co. into Public Limited Co - Series 395
Conversion of
Private Limited Co. into
Public Limited Co.
Short Summary:
This
brief write up an attempt has been made to unlock the technicalities related to
Conversion of Private Company into Public Company prescribed under Companies
Act, 2013. I believe that the procedure for Conversion of Private Limited
Company into Public Company along with sample resolutions discussed through
this article would be of some help for you all.
Conversion
of status of company from private to public would become effective form the
date of receipt of the approval of the Registrar through the change of name
would become effective on the issue of fresh Certificate of Incorporation.
The Companies Act, 2013 was expected to simplify the provisions
but on the contrary it brought lot of restrictions on doing business. Therefore
the private companies are converting themselves into public limited company.
REGULATORY REQUIREMENTS:
The
procedure for conversion from one company to the other is expounded within the
Act with certain statutory requirements such as alteration of the Memorandum of
Association (MOA) and Articles of Association (AOA) of the company.
Legal
Provisions related to Conversion of Private Company into Public Company are
given in Section 18 and 14 of the Companies Act, 2013 read with Rule 33 of
Companies (Incorporation) Rules, 2014.
As per Section 13 and Section 14 of the Companies Act 2013 read
with Rule 33 of Companies (Incorporation) Rules, 2014. A private company can be
converted into the public company only after obtaining approval of shareholders by way of passing of special resolution in general meeting.
Relevant Sections & Rules of the Act:
2.
Section 14: It provides for alteration of
articles.
3.
Section 18: It allows an existing Company
to convert itself as a company of other class under this Act by alteration
of memorandum and articles of the company in accordance with the provision of
chapter II of the Act.
4. Rule
33 of Companies (Incorporation) Rules, 2014: INC-27 for Conversion of Public
Company into Private Company.
Process
for Conversion
First Step:
To Pass a board resolution to get in
principal approval of Directors for conversion of a private company into a public
company by altering the AOA subject to the approval of Central Government
(Power of Central Government assigned to ROC).
STEP –II: Held Board Meeting: (As per section
173 and SS-1)
§ To consider In-principal approval for
conversion of Private Company into Public Company by altering Articles.
§ Get Approval to Alteration in Article
of Association and recommending the proposal for members' consideration by way
of special resolution.
§ Fixing the date, time, and venue of the
general meeting and authorizing a director or any other person to send the
notice for the same to the members.
§ To approve Notice of EGM along with
explanatory statement to be annexed with the notice as per Section 102(1) of
the Act.
STEP- III: Issue
Notice of General Meeting: (Section 101)
Notice of EGM shall be given at least 21 days before the actual date of EGM. EGM
can be called on Shorter Notice with the consent of atleast majority in number
and ninety five percent of such part of the paid up share capital of the company giving a right to vote at
such a meeting:
§ All the Directors.
§ Members
§ Auditors of Company
The notice shall specify the place, date, day and time of the meeting
and contain a statement on the business to be transacted at the EGM
Second Step:
STEP- IV: Hold General
Meeting: (Section 101)
§ Check the Quorum.
§ Check whether auditor is present, if
not. Then Leave of absence is Granted or Not. (As per Section- 146).
§ Pass Special
Resolution.[Section-114(2)]
§ Approval of Alteration in AOA for
conversion of Private Company into Public Limited Company
§ Approval of alteration in Memorandum of
Association.
STEP-
V: Filing of form with ROC: (Section 117)
File Form MGT-14 (Filing of Resolutions and
agreements to the Registrar under section117) with the Registrar along with the
requisite filing within 30 days of passing the special resolution, along with
given documents:-
§ Certified True Copies of the Special
Resolutions along with explanatory statement;
§ Copy of the Notice of meeting send to
members along with all the annexure;
§ A printed copy of the Altered Article
of Associations and Memorandum of Association.
Note: It
is relevant to note that First you have to file form MGT.14 as SRN No. of form
MGT.14 will be used in form INC.27
Third Step:
File Form INC-27 with the Registrar of Companies
within 30 days from date of order of NCLT- along with given documents:-
§ Minutes of the member’s meeting where
approval was given for conversion and alteration of the articles of
association.
§ Copy of SR
§ Copy of altered MoA & AoA
§ Any other information may be in
optional attachment
Note:
Some ROC require following further documents
in INC-27.
§ Affidavit from Director or MD or WTD
stating following:
ü Letter of no objection have been obtained from all creditors
/Debentures holders.
ü No demand from Sales Tax or Income Tax or Excise is pending
§ Certified list of Creditors of the
Company as on date of EGM.
§ Certified list of Members of the
Company as on date of EGM.
§ Proof of filing of statutory report
with ROC.
§ List of cases pending before any court
of Law where company is a party
ROC shall close the former registration
and issue fresh certificate of incorporation, after registering the documents
submitted for change in class of company along with order of NCLT.
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POST CONVERSION REQUIREMETNS
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1.
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Arrange new PAN No. of the company
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2.
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Arrange
new stationary with new name of the Company
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3.
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Update company bank account details
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4.
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Intimate
all the concerned authorities like GST / Bank
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5.
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Printed copy of new MOA & AOA.
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(Author – CS Divesh
Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi
and can be contacted at csdiveshgoyal@gmail.com). Disclaimer: The entire
contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION
WITH THE USE OF THE INFORMATION
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