Section 18 of Companies Act, 2013 deals with conversion of existing Company from form to another by alteration of Memorandum and Articles of the Company. The conversion process of the Company under this section shall not affect any debts, liabilities, obligations or contracts incurred or entered into by or on behalf of the Company before conversion and the same may be enforced if no conversions are complete by the Company.
|1.||Public limited company||“Public Company” means a company which—
(a) is not a private company;
(b) Has a minimum paid-up share capital of five lakh rupees or such higher paid-up capital, as may be prescribed:
Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles.
|2.||Basic Requirements||1. Minimum 7 Members
2. Minimum 3 Directors
3. If there are only 2 Directors in a Private Limited Company, an additional Director shall be appointed in the Board Meeting, to comply the requirement of minimum three Directors.
4. The Company shall become a Public Limited from the date of passing special resolution. However the change of name by deleting the word Private shall take effect only on issue of fresh certificate by ROC.
|3.||Benefits of conversion of Private Limited Company into Public Limited Company||
Please refer our article on acceptance of deposits – https://taxguru.in/company-law/acceptance-deposits-companies-act-2013-rules.html
|Procedure for conversion of Private Limited Company to Public Limited Company|
|4.||Issue Notice for calling of Board Meeting||Notice to be issued for conducting of Board Meeting and agenda to be circulated along.
The proposed agenda shall be :
|5.||Holding of Board Meeting for discussing the agenda items||
|6.||Issue notice of general meeting||
|7.||Conduct General Meeting||
|8.||File form MGT- 14||
Attachments to Form MGT 14:
|9.||File form INC – 27||
Attachments to Form INC 27:
|10.||Approval of MGT-14 and INC-27||If the ROC is satisfied that the Private Company has complied the prescribed requirements of conversion, forms shall be approved by ROC.|
|11.||Certificate of Incorporation from ROC||Once ROC has approved the forms MGT 14 and INC 27, it will issue fresh Certificate of Incorporation and shall cancel former registration of Company.|
This article is co-authored by Mrs. Asha Diwakar (Practicing Company Secretary, Bangalore) who is Co-founder and Designated Partner of M/s CLAAT Corporate Advisors LLP (Chhota CFO).
Chhota CFO (www.chhotacfo.com) offers a range of services and integrated solutions in the areas of India corporate regulations, compliance, accounting and taxation for Start-ups, SMEs and Corporates – right from incorporating new companies, statutory registrations, secretarial compliance, bookkeeping and accounting, tax consulting & filing, audit & assurance, FEMA and other associated professional services to start, maintain and grow your business.
Mrs. Asha Diwakar may be contacted at email@example.comfirstname.lastname@example.org and +91 973 973 6999/ +91 991 666 8146
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