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Conversion of Private Company into Public Company

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Convert private limited company into a public limited company has the procedures prescribed in the act for conversion of status. – PowerPoint PPT presentation

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Title: Conversion of Private Company into Public Company


1
Convert private company into a public company
2
The public company has the following procedures
prescribed in the act for convert private limited
company for their status. Similarly, a public
limited company can convert itself into a private
limited company.
3
A company which is initially incorporated as a
private limited company. The company can change
its status into that of public limited company.
The public company has the following procedures
prescribed in the act for conversion of status.
Similarly, a public limited company can convert
itself into a private limited company.
  • Circumstances for conversion of private limited
    company into public limited company

A private limited company can convert itself into
a public limited company in the following
circumstances
(a) voluntarily on its own
volition
(b) by reason of default
(c) by operation
of law
4
Conversion of a private limited company into
public limited company on own volition
  • A private limited company can convert itself into
    a public limited company on its own volition by
    complying with the following requirements
  • (i) Change the company name by passing a special
    resolution in the manner provided in section 21.
    If any change in a company name. It  can be
    occurred by passing a particular declaration.
    Obtaining approval of the central government by
    delegation registrar of companies.
  • Approval of ROC is not necessary where the only
    difference in the name is the element thereto or
    deletion therefrom of the word Private
    consequent on the conversion. In conformity with
    the provisions of the act, of a public limited
    company into private limited company or a private
    limited company into public limited company.
  • (ii) alter the articles  to delete the
    prohibitions, restrictions and limitations
    contained in section 3(1).
  • (iii) increase the number of members to more than
    fifty.

5
A private limited company can convert itself into
a public limited company on its own volition by
complying with the following requirements
  • (I) Change the company name by passing a special
    resolution in the manner provided in section 21.
    If any change in a company name. It  can be
    occurred by passing a particular declaration.
    Obtaining approval of the central government by
    delegation registrar of companies.
  • Approval of ROC is not necessary where the only
    difference in the name is the element thereto or
    deletion therefrom of the word Private
    consequent on the conversion. In conformity with
    the provisions of the act, of a public limited
    company into private limited company or a private
    limited company into public limited company.
  • (ii) alter the articles  to delete the
    prohibitions, restrictions and limitations
    contained in section 3(1).
  • (iii) increase the number of members to more than
    fifty.

6
For conversion of a private company into a public
company the following steps are required to be
taken
  • 1.take the necessary decision in the board
    meeting. Define the agenda, time, place for
    converting a meeting to alter the articles of
    association consequently. The company name by
    particular resolution.
  • 2.Issue notices for declaring the special
    declarations with eligible informative statements
    in the general meeting.
  • 3.Convene the meeting and pass the special
    declaration to the following effect
  •               (i) To cancel those articles which
    are needed to be considered in the articles of a
    private limited company only. Such other articles
    why do not assign to a public limited company. It
    should be cancelled and those which implement
    should be attached.
  •           (ii) Consequent to the above
    changes, to delete the word Private from its
    company name.

7
  • 4. The approval of central government by
    delegation registrar of companies to change of
    name wherever necessary. Such registration is not
    required. Where the change relates only to the
    addition to or deletion from the name. The word
    Private incidental on rectification.
  • 5. Register either the description in the form as
    ordered under schedule II. The statement in lieu
    of descriptions in the form as imposed under list
    IV within 30 days of passing the above special
    resolution.
  • 6. Filling of form no. 29 is not required by a
    private limited company converted into a public
    limited company for their registration
    activities.
  • 7. Register the special declaration passed and
    the explanatory statements in form No. 23 with
    the registrar within 30 days of passing them. The
    Chennai (ROC) is required for their registration.
  • 8. Assign to the registrar for providing a fresh
    certificate of Registration in the changed name.
    The present company name with the word Private
    deleted. On issue of such fresh certificate, the
    company name is to be changed and converted a new
    company. It is the final stage of registering a
    company registration.
  • It should thus be noted that company registration
    is to be finalized. The company becomes a public
    limited company. The special resolution to change
    the articles to make it a public limited company
    is passed. The change of a company name becomes
    effective. Only on the issue of the fresh
    certificate of registration by the registrar in
    Chennai (ROC) for changed company name.

8
Conversion of a private company into a public
company by reason of default
9
A private limited company is required by law  to
provide by its articles for the following namely
  • (i) restrictions on the rights to transfer its
    shares
  • (ii) restriction on the maximum number of its
    members which should not exceed fifty.
  • (iii) prohibition on any request to the public to
    approve for any shares in or debentures of the
    company registration is to be approved.
  • (iv) The period on any approval or invitation of
    deposits from persons other than its directors,
    members or relatives.

Where a failure is made with the aforesaid
restrictions, prohibition and limitation are not
having in the clauses of a private limited
company. The company shall vanish to be a private
limited company. It shall not be authorized to
the exemptions and privileges  consulted on
private company for purposes of this act.
10
A petition praying for relief from consequences
of failure to simply with conditions constituting
it a private limited company. It is to be form to
the regional bench of the company law board in
Chennai authorities. The regulations 1991 along
with an application fee of Rs.200/-by the
following documents.
  • (i) Certified true copy of articles of
    association and memorandum
  • (ii) Copy of document showing that default has
    been involved in following with the provisions
    ordered down in clause.
  • (iii) The legal document verifying the petition.
  • (iv) Bank draft showing payment of request fee.
  • (v) Memorandum of impression in Form No.5 of
    Annexure 1.
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