In re Azim Premji Trust Services Private Limited (NCLT Bengaluru)
Summary: The NCLT Bengaluru Bench, on 4th September 2024, permitted the conversion of Azim Premji Trust Services Pvt. Ltd. from a company limited by shares to a company limited by guarantee without share capital. The petition, filed under Sections 230-232, 18, and 66 of the Companies Act, 2013, faced opposition from the Registrar of Companies (ROC) and the Regional Director (RD), who cited the absence of specific rules for such conversions. The petitioner argued that while the Act doesn’t provide explicit rules, it also doesn’t prohibit the conversion, relying on Section 18 for altering a company’s class and Section 230 for scheme arrangements. The Tribunal noted that Section 230 is a comprehensive code for reorganization and permits conversion, even in the absence of formal rules. It clarified that a company limited by guarantee does not require share capital, dismissing objections regarding the reduction of share capital to zero. The order highlighted the Tribunal’s broad powers under Section 230, setting a significant precedent for future conversions. The ROC was directed to issue a fresh certificate reflecting the company’s new status.
1. Introduction & Legal Framework
The NCLT Bengaluru Bench delivered an order on 4th September 2024, sanctioning the conversion of Azim Premji Trust Services Private Limited from a company limited by shares to a company limited by guarantee without share capital. The case was filed under Sections 230-232, 18, and 66 of the Companies Act, 2013.
