PLEASE EXPLAIN PROCEDURE FOR CONVERSION OF PRIVATE CO TO PUBLIC CO.
Chandan Kumar
(Strategy Analyst)
(384 Points)
Replied 24 March 2012
If the conversion is by choice then provisions of SEC44 applies as follows...
1) Take necessary decission at board meeting and fix the time, place and agenda of the AGM
2) Pass a special resolution to change the name of the company by deleting the word Private and adding the word public. permission of central govt is not necessary for change of name.
3) Pass a special resolution deleting the restrictions specified in sec 3(1)(iii) of co's act and adding the provisions those applicable to public co's.
4) File the copy of special resolution so passed with the registrar of co's within 30 days of passing resolution.
5) In case the members are less than 7 then increase the membership to atleast not less than 7.
6) In case the no of directors are less than 3 then increase the directors to atleast not less than 3 .
7) File a prospectus or a statement in lieu of prospectus within 30 days of passing special resolution in the prescribed form.
8) The prospectus or statement in lieu of prospectus so filed should be in confirmity with part 1 and 2 of schedule 2 and with part 1 and part 2 of schedule 4 respectively.
9) The prospectus or statement in lieu of prospectus so filed shall be true and should not contain any misrepresentation which would misguide the investors.
10) If default is made in compliance with the provisions of this act then every person who is in default shall be punishable with a fine whcih may extend to rs 5000 for every day till the default continues.
Neha Gupta
(PCS)
(377 Points)
Replied 24 March 2012
Drafts of resolution required for conversion:
“RESOLVED THAT pursuant to the provision of section 21, 31, 44 and other applicable provisions of the Companies Act, 1956 the status of the company be and is hereby converted from M/s. .......... Private Limited to M/s. .................. Limited.
RESOLVED FURTHER THAT pursuant to the provision of the Companies Act, 1956 the name of the Company be and is hereby changed from ................ Private Limited into ..............Limited by deletion of the word ‘Private’ before the word Limited in the name of the Company and necessary correction in the name Clause of the Memorandum And Article of Association and all such other papers, document and matter be made to give effects of the changed name accordingly.
RESOLVED FURTHER THAT All Director of the Company be and are hereby authorised jointly & severally to sign and file all Forms and other papers & document with the Registrar of Companies, N.C.T of Delhi & Haryana for the purpose of this resolution and do all such acts, things, deeds as may be necessary.
For alteration in articles:
“RESOLVED THAT the new set Article of Association incorporating the provision applicable to the Limited Companies as places before the Meeting be and is hereby substituted and adopt in the place of the existing Article of Association of the Company.
RESOLVED FURTHER THAT All Director of the Company be and are hereby authorised jointly & severally to sign and file all Forms and other papers & document with the Registrar of Companies, N.C.T of Delhi & Haryana for the purpose of this resolution and do all such acts, things, deeds as may be necessary.”
Make sure that capital if required is also needed to be increased to 5 Lac.
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