Procedure For Conversion of Public Company Into Private Company
STEP – I
Convene Board Meeting of Directors:
-To consider in principle Approval for conversion of Public Company into Private Company by altering Articles.
-Get Approval to Alteration in Article of Association and Memorandum 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 notice as per Section 102(1) of the Act
STEP- II
Issue Notice of General Meeting:
-Pass Special Resolution. [Section-114(2)]
-Approval of Alteration in AOA for conversion of Public Company into Private Limited Company
-Approval of alteration in Memorandum of Association of the Company
STEP- III: 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.
STEP- IV: Drafting an Filing of Application with Regional Director (in Form RD-1)-
-Application in Regional Director shall be filed within 60 days from passing of Special Resolution in e-form RD-1.
-Application shall be accompanied by following Documents:
-Copy of the memorandum and articles of association with proposed alteration
-Copy of Minutes of General Meeting (mentioning details of votes cast in favour or against)
-Copy of Attendance Sheet of General Meeting
-Board Resolution for authorizing to file application for conversion (dated not earlier than 30 days)
Other Documents to be attached:
-Declaration in form of Affidavit:
–Declaration by Key Managerial personnel (If company not having KMP then by any Director) i.e.:
1. The Company limits the number of its members to 200, and that no deposit has been accepted by the Company in violation of the Act and
2. There is no non-compliance of Section 73 to 76A, 177, 178, 185,186 and 188 of Act an rules made there under
3. That, No resolution is pending to be filed in terms of Section 179(3) and
4. That the company never listed on stock exchange and if listed complied with the relevant
-Details of Creditors:
There shall be attached to the application, a List of Creditors and Debenture Holders, drawn up to the latest practicable date preceding the date of filing of petition by not more than 30 days, setting forth the following details, namely:-
-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 or any such claim admissible to proof in winding up of the company, the value, so far as can be justly estimated of such debt or claim:
-Affidavit Verifying List of Creditors:
The applicant company shall file an affidavit, signed by the company secretary of the company, if any, and not less than two directors of the company, one of whom shall be a managing director, where there is one, to the effect that they have made a full enquiry into the affairs of the company and, having done so, have formed an opinion that the list of creditors is correct, and that the estimated value as given in the list of the debts or claims payable on a contingency or not ascertained are proper estimates of the values of such debts and claims and that there are no other debts of , or claims against, the company to their knowledge.
Publication of News Paper Advertisement:
The company shall at least Twenty One days before the date of filing of application:
-News Paper Advertisement: Advertise the petition in Form No. INC 25A, at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and at least once in English language in an English newspaper circulating in that district. (Widely Circulated in the State in which the registered office of company is situated)
-Speed Post to Creditors: serve, by registered post with acknowledgement due, individual notice to each debenture-holder and creditor of the company; and
-Service of Petition to ROC/RD: serve, by registered post with acknowledgement due, a notice together with the copy of the application to the Central Government (Regional Director), Registrar of Companies and to the Securities and Exchange Board of India, in the case of listed companies and to the regulatory body, if the company is regulated under any other Act.
STEP V:
File Form RD-1 with the Regional Director within 60 days of passing of Special Resolution with all the above mentioned annexure:
-MOA & AOA
-General Meeting Minutes and Attendance Sheet Board Resolution authorizing application Declarations
-List of Creditors
-Affidavit verifying the list of creditors Copy of News Paper Advertisement
Other Provisions:
A. Objection if Any Received:
Where any objection of any person whose interest is likely to be affected by the proposed application has been received by the applicant, it shall serve a copy thereof to the Central Government on or before the date of hearing.
Where No Objection Is Received:
Where no objection received from any person in response to the advertisement or notice under sub-rule (5) or otherwise, the application may be put up for orders without hearing and the order either approving or rejecting the application shall be passed within 30 days of receipt of the application.
Where Objection Is Received:
After checking of application with Annexure the hearing will take place at the Regional Director office and it should be represented by the company or practicing professional or advocate.
1. The Regional Director will make an order confirming the alteration on such terms and conditions, if any, as it thinks fit, and may make such order as to costs as it thinks proper:
2. Obtain certified copies of the order confirming the shifting of registered office from one state to another, passed by the Central Government,
FILE E-FORM INC-28 WITH ROC WITHIN 30 DAYS OF CONFIRMATION OF SHIFTING BY REGIONAL DIRECTOR ALONG WITH COPY OF ORDER.
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