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conversion of public limited to private limited. (Corporate Law)

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This query is : Resolved

Author : Anonymous

( Author )
15 August 2010

Please provide me the deatail procedure of conversion of private limited to public limited.


CA. SANAT PYNE

( Expert )
15 August 2010

Conversion of a Private Limited Company into Public Limited
Whenever it is proposed to convert a private limited company into a public limited company, the following steps are involved:—
(a) The Board of directors of such private limited company shall accord their approval to the proposal of such conversion;
(b) A General meeting of the shareholders be called to get approval of the members by means of a special resolution to delete the conditions as per section 3(1)(iii) of the Companies Act, 1956 in the Articles of Association and also to modify the Articles in other respects and also to delete the word "Private" from the name of such company; (Specimen of Special Resolutions given in Appendix 4)
(c) After passing of special resolution by the shareholders in general meeting, a certificate copy of the special resolution together with the explanatory statements and amended copy of the Memorandum and Articles shall be filed with the Registrar of Companies within 30 days of the passing of the said resolution in e-Form 23;
(d) Request the Registrar of Companies to delete the word "Private" from the Company's name Upon this, the Registrar of Companies shall issue fresh certificate of incorporation consequent to such conversion;
(e) In terms of section 44 of the Companies Act, 1956, if a private company alters its articles in such a manner that they no longer include the provisions under section 3(1)(iii) which are required to be included in the articles of in order to constitute it a private company, the company as on the date of the alteration shall cease to be a private company and within a period of 30 days after the said date shall file with the Registrar of Companies either a prospectus or a statement in lieu of prospectus;
(f) It has to be ensured that number of members shall be at least seven and directors at least three at the time of conversion.


CA. SANAT PYNE

( Expert )
15 August 2010

Special resolution for conversion of private limited company into public company
RESOLVED THAT pursuant to the provisions of section 31, 44 and other applicable provisions of the Companies Act, 1956 the status of the Company be and is hereby converted from PRIVATE LIMITED into PUBLIC LIMITED Company.
FURTHER RESOLVED THAT pursuant to the provisions of the Companies Act, 1956 the name of the Company be and is hereby changed from KW PRIVATE LIMITED to KW LIMITED by deletion of the word 'Private' before the word Limited in the name of the Company and necessary corrections in the name Clause of the Memorandum And Articles of Association and all such other papers, documents and matters be made to give effect of the changed name accordingly.


CA. SANAT PYNE

( Expert )
15 August 2010

Special resolution for adoption of new set of articles
RESOLVED THAT the a new set of Articles of Association incorporating the provisions applicable to the Public Limited Companies as placed before the Meeting be and is hereby substituted and adopted in the place of the existing Articles of Association of the Company.


CA. SANAT PYNE

( Expert )
15 August 2010

Explanatory statement Item No. …. To …
The Company was incorporated on 7th Sept. 1987 as a Private Limited Company which put some restrictions of the Company and limiting its scope for its working. The Board of directors of the Company considered that looking into the expanded business activities the Company should be converted into a Public Limited Company to get confidence of the public as a whole.
As per the provisions of Section 21, 31, 44, and other applicable provisions of the Companies Act, 1956 consent of the Members is required by way of Special Resolution to convert the Company from Private Limited to Public Limited. Therefore your Directors recommend the resolution for approval as a Special Resolution as set out under item no. … to … to of the Notice of the Meeting. Item No. ….
The existing Articles of Association of the Company are limiting the working of the Company as the Articles includes the clause which are restricting the operations of the Company including therein the restrictive provisions of section 3(1)(iii) and other provisions of the Companies Act, 1956. In view of the change in the status of the Company into the Public Limited and to incorporate the provisions of the Companies Act, 1956, your directors proposes to substitute the set of the existing Articles of Association with the new set of the Articles of Association.


Ankur Garg

( Expert )
16 August 2010

Kindly check my article available at the link below:


http://www.caclubindia.com/articles/conversion-of-a-public-company-into-a-private-company-5710.asp


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