Procedure For Conversion of Public Company into Private Company


Legal Provisions related to Conversion of Public Company into Private 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 public company can be converted into the private company only after obtaining its shareholders approval by way of passing of special resolution in general meeting.

Procedure For Conversion of Public Company into Private Company

1.  Issue notice along with agenda of board meeting in accordance with Section 173(3) read with Secretarial Standard 1 by giving not less than seven days notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post (either registered or speed) or by electronic means or by courier, by facsimile or E-mail.

2.  Convene board meeting and pass board resolution for the following agenda’s:
(a) To Get in-principal approval of Directors for Conversion of Private Company into One Person Company (OPC);
(b) Fix date, time and place for holding Extra-ordinary General meeting (EGM) to get approval of shareholders, by way of Special Resolution, for Conversion
(c) To approve notice of EGM along with Agenda and Explanatory Statement to be annexed to the notice of General Meeting as per section 102(1) of the  Companies Act, 2013;

3. Prepare and circulate draft minutes within 15 days from the date of the conclusion of the Board Meeting, by hand/speed post/registered post/courier/e-mail to all the Directors for their comments and also  follow the procedure prescribed in Secretarial Standard 1 for preparing, circulation, signing and compiling of Board Minutes.

4. Issue  Notice of EGM  in accordance with  the Provisions of the Section 101 of the Companies Act 2013 read with Secretarial Standard 2 in writing to below mentions by giving not less than clear 21 days either in writing or through electronic mode before the actual date of the EGM :
(a) every Member
(b) the Directors
(c) Auditors of the company
(d) Debenture Trustees, if any
(e) Other Specified persons, if applicable

Provided that a general meeting may be called after giving a shorter notice if consent is given in writing or by electronic mode by not less than ninety-five per cent of the members entitled to vote at such meeting.

5. Hold General Meeting and pass Special Resolution regarding Alteration of Article for conversion and Alteration of Name clause in MOA.

6. Within 30 days of passing of the Special Resolution, file Form MGT-14 along with following annexure:-
(a) Copy of Special Resolution
(b) Copy of Altered MOA
(c) Copy of Altered AOA
(d) Optional Attachments, if any,

7. Decrease the Number of Members to 200 or below.

8.Ensure that the signed and dated minutes of proceedings of extraordinary general meeting was entered in minutes book within 30 days of the conclusion of the meeting and also follow the procedure prescribed for preparing, circulating, signing and compiling of Minutes in accordance with Secrtetarial Standards 2 .

9. File Form Inc-27 with ROC after approval of MGT-14 with following attachments:
(a) Minutes of the Meeting;
(b) Altered Articles of Association;
(c) Order of Condonation of delay;
(d) Optional Attachments, if any;

10. Post Conversion Formalities :
(a) Intimate all the concerned authorities viz. tax department, banks etc about  conversion.
(b) Change the name of the Company in Material Documents.
(c) Surrender old Certificate of Incorporation so as to obtain New Certificate of Incorporation consequent upon conversion.
(d) Make necessary arrangements for new Common Seal and keep both old and new Common Seal in   safe custody.
(e) Have fresh copies of the altered memorandum and articles of association printed and give effect to certain changes in MOA and AOA in the Company.

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