Business Conversion

Fee Structure

Public Limited into Private Limited Company
Total : 40000/- INR


CONVERSION OF PUBLIC COMPANY INTO PRIVATE COMPANY

Keeping in view the relaxations provided to a Private Company, many public companies have converted into Private Companies or in the process of such conversion. Power of Conversion of Public Company into Private Company has been transferred to NCLT. The procedure for conversion from one company to the other is expounded within the Act with certain statutory requirements such as alteration of the Memorandum of Association (MOA) and Articles of Association (AOA) of the company. The Act sets out regulatory provisions under various sections, i.e., Section 13, 14, and 18, which are required for the purpose of conversion.

MANDATORY REQUIREMENTS

  1. Name clause of the Memorandum needs to be amended to include the word ‘Private’.
  2. The Articles of the Company shall be suitably amended for the insertion of restrictive provisions applicable to a Private Company. It is advisable to adopt a new set of Articles applicable to a Private Company.
  3. Company has not defaulted in the filing of Annual Returns or Financial Statement or any other document due for filing with the Registrar. [Rule 29(1) of Companies (Incorporation) Rules, 2014]
  4. Company has not defaulted in repayment of matured deposits or debentures or interest on deposits or debentures. [Rule 29(1) of Companies (Incorporation) Rules, 2014]

FOLLOWING PROCEDURE IS TO BE FOLLOWED:

1. Convene a Meeting of Board of Directors [As per Section 173 & Secretarial Standard-1 (SS-1)]

1)      Issue Notice of Board Meeting to all the Directors of Company at their addresses registered with the Company, at least 7 days before the date of Board Meeting. Shorter notice can be issued in case of urgent business.

2)      Attach Agenda, Notes to Agenda, and Draft Resolution with the Notice.

3)      Hold a meeting of the Board of Directors of the Company to discuss and approve the agenda of conversion

4)      Pass Board Resolution

  1.       for approving the proposal of conversion of Public Company into a Private Company, and to recommend the same for approval of Shareholders in General Meeting of the Company
  2.     to consider and approve the reduction in the total number of members of the company to a maximum of 200 members
  3.       to fix the day, date, time and venue of the General Meeting
  4.     to approve the draft notice for convening the General Meeting along with explanatory statement annexed to the notice as per the requirement of Section 102 of the Companies Act, 2013
  5.       to approve the draft new set of Memorandum and Articles of Association meeting the requirements of a Private Company and to recommend the same for approval of Shareholders
  6.       to authorize the Director or Company Secretary to sign and issue a notice of General Meeting. The notice of the general meeting must contain the text of Special Resolution for conversion of Company into a Private Company and consequent amendment in Memorandum and Articles of Association of Company
  7.     to delegate authority to Company Secretary or any one director of the company to sign, certify and file the required form with Registrar of Companies and to do all such acts and deeds as may be necessary to give effect to the proposed conversion.

5). Prepare and Circulate Draft Minutes within 15 days from the conclusion of the Board Meeting, by Hand/Speed Post/Registered Post/Courier/E-mail to all the Directors for their comments. 

2. Entries in the Register of Members (Section 88 read with Rule 5(1) of the Companies (Management and Administration) Rules, 2014

Companies whose shares are held in physical form shall make entries in the Register of Members in the Form MGT-1 within seven days after the Board of Directors approved the transfer of shares to reduce the number of members to a maximum of 200.

  1.  Convene General Meeting [Section 96, 100 and Secretarial Standard-2 (SS-2)]

o   Notice of General Meeting shall be given at least clear 21 days before the actual date of a General Meeting in writing, by hand or by ordinary post or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means or a Shorter Notice can be issued with the consent of at least majority in number and ninety-five percent of such part of the paid-up share capital of the company giving a right to vote at such a meeting in accordance with Section 101.

o   Notice will be sent to all the Directors, Members, Auditors of Company, Secretarial Auditor, Debenture Trustees, and to others who are entitled to receive the notice of the General Meeting.

o    Notice shall specify the day, date, time and full address of the venue of the Meeting and contain a statement on the business to be transacted at the Meeting.

o    Hold the General Meeting on a fixed day and pass a Special Resolution for conversion of Public Company into Private Company and altering the Memorandum of Association and Articles of Association including insertion of restrictive provisions as applicable to Private Company. Also, check the Quorum and check whether an auditor is present, if not. Then Leave of absence is Granted or Not.

o    Prepare the minutes of the General Meeting, get them signed, and compile accordingly. [Procedure for Preparation and Signing of Minutes of General Meeting].

3. Filing of forms with ROC [Section 117]

  •  The company shall file Form MGT-14 with ROC within 30 days of passing such resolution along with given documents as an attachment certified true copies of the special resolutions along with explanatory statement
  1. copy of the notice of meeting sent to members along with all the annexure
  2. a printed copy of the Memorandum of Association and Article of Association
  3. copy of Attendance Sheet of General Meeting
  4. shorter notice consent, if any

4. Publication of an Advertisement [Rule 41(5) of the Companies (Incorporation) Rules, 2014]

The company shall, at least twenty-one days before the date of filing of the application advertise in the Form INC-25A, in a vernacular newspaper in the principal vernacular language in the district and in the English language in an English newspaper, widely circulated in the State in which the Registered Office of the Company is situated

5. Draft and File an Application for Conversion of Public Company into Private Company [Rule 41(1) and 41(3) of the Companies (Incorporation) Rules, 2014]

An application for the conversion of Public Company into Private Company shall be drafted and to be filed to Regional Director within sixty days from the date of passing of Special Resolution in e-Form RD-l along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014

6. Approval of Application, in case of No Objections [Rule 41(6)(a) of the Companies (Incorporation) Rules, 2014

7. Submission of Further Information as demanded by Regional Director [Rule 41(6) of the Companies (Incorporation) Rules, 2014]

8. Submission of Copy of Objection with Regional Director [Rule 41(7) of the Companies (Incorporation) Rules, 2014

9. Approval of Application of Conversion [Rule 41(9) of the Companies (Incorporation) Rules, 2014]

 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

10. File Form INC-28 with ROC [Rule 41(9) of the Companies (Incorporation) Rules, 2014]

The company shall file the order conveyed by the Regional Director with the Registrar in Form INC-28 within fifteen days from the date of receipt of approval along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.

11. File Form INC 27 with ROC [Section 14(2) read with Rule 33(2) of the Companies (Incorporation) Rules, 2014]

The company shall file the copy of the order of the Central Government approving the alteration of the article along with the printed copy of altered articles with the Registrar in Form INC -27 with fee together within fifteen days from the date of receipt of the order.

12. On Being satisfied the ROC will register the conversion and issue a new certificate of incorporation.

 

Service Delivery Process followed by White Code Legal:

  1. The Client has to register themselves on our website.
  2. Once the Client is registered, we raise a Service Request.
  3. The Client receives a proforma invoice with an option to confirm and pay now or pay later.
  4. Once the Client confirms, our dedicated relationship manager liaisons with our experts and clients share a list of client information required to deliver the service.
  5. Once we receive the information, we take the required steps to deliver the service and the service request is closed.

Service Inclusions

  • Professional Fees

Service Exclusions

  • GST, Government Fee, and other Additional Taxes

 

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