Conversion of Public Company into Private Company

Key requirements/conditions:
• The company shall not be listed on any recognized stock exchange.

• In case of a listed company, it will have to wait for atleast one year after its delisting

• DIN (Director Identification Number) for all the Directors

• DSC (Digital Signature Certificate) for one of the Directors

Steps in Conversion of a Public Limited Company into a Private Limited Company
Step No.

Steps
Timeframe
(Working days)
Processing
1
Board Meeting
1
For consideration of the proposal of conversion of the Public company into a Private company.
2
Notice of General meeting
21
Give 21 days’ clear notice for the General Meeting proposing the Special Resolutions with suitable Explanatory Statement.
3
Filing of Special Resolution with RoC
1

File Form No. 23 within 30 days of passing of the resolution

Attachments:
Special Resolution and the Explanatory Statement

Memorandum and Articles (before and after alteration)

4
Publish Newspaper Notice for conversion of the Company
2

In two widely circulated dailies of the State where the Regd. Office of the company is situated.

In two widely circulated dailies of the State where the Regd. Office of the company is situated.

5
Application to the Central Government
25








File Form 1B with the RoC

Attachments:
Notice of extra-ordinary general meeting
Minutes of extra-ordinary general meeting
Copy of special resolution
Copy of newspaper advertisement.
Affidavit that the company is not listed on any stock exchange.
Reference number, date of passing and date of filing the e-Form 23.
Payment of requisite application fee.
One copy each of the annual reports for the last three financial years.
Copy of the last annual return.
Altered Memorandum and Articles of Association.
No objection letters from major unsecured and all secured creditors supported by an Affidavit.
Reasons for conversion.
Terms of appointment of all managerial personnel.
Power of attorney in favour of the authorised representative.

On receipt of application, the Registrar of Companies (ROC) shall examine:-
• Whether the interest of the public and particularly that of the creditors will be adversely affected?

• Whether the company is listed?

• Capital contribution by members.

• Whether e-Form 23 has been passed and taken on record?

• Whether the reasons for conversion are just and sufficient?

• How many members voted for the resolution?

• Whether any complaint against the company is pending?

• Whether any show cause letter has been issued to the company or its Directors?

• If there is any objection from members and creditors.

If the ROC approves the application, he refers it to Technical Section and Prosecution Section for their report.

The Technical Section reports on whether the relevant e-Form23 and the last years annual report and annual return has been filed and passed/taken on record.

The Prosecution Section reports on whether any complaint is pending from anybody against the company. If during the scrutiny any adverse point arises, that has to be looked into and the authorised representative should take the initiative to make good the default or defect.

Issue of fresh Certificate of Incorporation

If the reports are satisfactory, the ROC will issue a letter granting its approval for conversion of a public company into a private company. The concerned ROC then issues fresh certificate of incorporation consequent upon change of name after conversion of the company from ‘Public Company’ to ‘Private Company’.

Leave a Reply

Your email address will not be published. Required fields are marked *