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
1) Notice for board meeting
2) Extraordinary general meeting to pass special resolution
Form MGT-14 with the Registrar of Companies (ROC) which comprises of the essential details as required by the Registrar such as, inter alia, the altered MOA, and A0A of the company. This form is required to be filed within 30 days of the special resolution being passed in the company.
Form INC-27 as prescribed under the Act and under section 33 of the Companies (Incorporation) Rules, 2014, has to be filed with the ROC with supporting documents in order to complete the conversion process. This form is to be filed within 15 days of the receipt of the order from the National Company Law Tribunal. The attachments to this form include the altered AoA & MoA, the special resolution and most importantly, the order passed.
4) Issue fresh certificate of incorporation by registrar
1) The process is also incomplete without the approval of the new authority constituted, i.e., National Company Law Tribunal (NCLT), replacing the Company Law Board as under the old Companies Act, 1956.
2) The NCLT has been authorized vide the NCLT Rules, which came into effect on July 21, 2016. The power was transferred to the NCLT.
3) The order approving the conversion of the company to a private company passed by the NCLT must also be filed with the ROC along with the other requisite documents.
4) Pursuant to the passing of the special resolution, a petition must be filed in Form NCLT-1 as provided under Rules 68 of the NCLT Rules not less than 3 months from the passing of the resolution.
5) The supporting documents with the petition include copies of the MOA & AOA, documents proving the company is no longer a public company, verification affidavit and the payment of application fees (INR 5000/-).
6) The list of creditors along with the amounts due to them is to be submitted to the NCLT as well.