√ Applicable Section:
- Section 13 – Alteration of Memorandum
- Section 14 – Alteration of Articles
- Section 18 – Conversion of Companies Already Registered i.e., Public to Private
- Section 117 – Filing of Resolution
√ Applicable Rule:
♦ Convene Board Meeting to consider In-principal approval for conversion of Public Company into Private Company by altering MOA and AOA & for Calling EOGM. Issue 21 days clear notice to call EOGM.
♦ Hold EOGM. Pass special resolution to alter MOA & AOA.
♦ File certified true copy of special resolution in Form MGT-14 within 30 days along with explanatory note, notice & altered MOA & AOA.
♦ Prepare Application for Conversion of Public Co. to Pvt. Co. along with following documents
- Copy of the memorandum and articles of association with proposed alterations
- a copy of the minutes of the general meeting at which the special resolution authorising such alteration was passed
- Details of votes cast in favour and or against with names of dissenters;
- copy of Board resolution dated not earlier than thirty days, as the case may be, authorising to file application for such conversion
- Declaration in form of Affidavit by KMP / Director :
i. the company limits the number of its members to 200;
ii. that no deposit has been accepted by the company in violation of the Act and rules made thereunder;
iii. that there has been no non-compliance of sections 73 to 76A, 177, 178, 185,186 and 188 of the Act and rules made there under;
iv. that no resolution is pending to be filed in terms of sub-section (3) of section 179;
v. that the company was never listed in any of the Regional Stock Exchanges and if was so listed, all necessary procedures were complied with in full for complete delisting of the shares in accordance with the applicable rules and regulations laid down by SEBI
- The Application shall out the following particulars:
(a) the date of the Board meeting at which the proposal for alteration of Memorandum and Articles was approved;
(b) the date of the general meeting at which the proposed alteration was approved;
(c) reason for conversion into a private company,
(d) effect of such conversion on shareholders, creditors, debenture holders, deposit holders and other related parties;
(e) details of any conversion made within last five years and outcome thereof along with copy of order;
(f) details as to whether the company is registered under section 8.
- Attachments to application:
- a list of creditors, debenture holders, drawn up to the latest practicable date preceding the date of filing of application by not more than 30 days with following details:
- the names and address of every creditor and debenture holder of the company;
- the nature and respective amounts due to them in respect of debts, claims or liabilities;
- in respect of any contingent or unascertained debt, the value, so far as can be justly estimated of such debt:
- An affidavit to the effect that the directors have made a full enquiry into affairs of the company and, having done so, have formed an opinion that the list of creditors and debenture holders is correct, and that the estimated value as given in the list of the debts or claims payable on contingency or not ascertained are proper estimates of the values of such debts and claims that there are no other debts, or claims against, the company to their knowledge.
- Advertisement in Form INC-25A in a vernacular newspaper in the principal vernacular language in the district and in English language in an English newspaper, widely circulated in the State in which the registered office of the company is situated. Further the same:
- Should have been published 21 days before filing the application.
- The copy of the same should have been served with registered AD post, individual notice on each debenture holder and creditor of the company; and
- Should have been served, by registered post with AD, a notice to the Regional Director and Registrar and to the regulatory body, if the company is regulated under any law for the time being in force.
- File Form RD-1 with the Regional Director within 60 days of passing of Special Resolution with all the above mentioned annexures like:
- MOA & AOA
- General Meeting Minutes and Attendance Sheet
- Board Resolution authorizing application
- List of Creditors
- Affidavit verifying the list of creditors
- Copy of News Paper Advertisement
- Where no objection has been received from any person in response to the advertisement or notice referred to in sub-rule (5) and the application is complete in all respects, the same may be put up for orders without hearing and the concerned Regional Director shall pass an order approving the application within 30 days from the date of receipt of the application.
- In case RD seeks further information / application is defective or incomplete, he shall within 30 days give intimation of such information called for or defects or incompleteness, on the last intimated e-mail address of the person or the company.
- Re-Submission of such application in Form RD-GNL-5
- Note : maximum of two re-submissions shall be allowed
- Where an objection has been received or Regional Director on examining the application has specific objection under the provisions of Act, the same shall be recorded in writing and the Regional Director shall hold a hearing or hearings within a period of 30 days.
- Company shall file an affidavit to record the consensus reached at the hearing.
- Note : Conversion shall not be allowed if any inquiry, inspection or investigation has been initiated against the company or any prosecution is pending against the company under the Act.
- On completion of such inquiry, inspection or investigation as a consequence of which no prosecution is envisaged or no prosecution is pending, conversion shall be allowed.
- The Order of RD shall be filed with ROC in Form INC-28 within 15 days from the date of receipt of approval.
File Form INC-27 for effecting the conversion of a public company into a private company, a copy of order of the RD along with altered AOA within 15 days.