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. Through this brief write up an attempt has been made to unlock the technicalities related to Conversion of Public Company into Private Company prescribed under Companies Act, 2013. Power of Conversion of Public Company into Private Company has been transferred to NCLT (Tribunal) w.e.f. 1st June, 2016 vide MCA notification S.O. 1934(E).
Conversion of status of company from public to private would become effective from the date of receipt of the approval of the Registrar by means of issuing a new certificate of Incorporation. Section 13, 14, 15 & 18 of Companies Act, 2013, Rule 33(2) Companies (Incorporation) Rules, 2014 and Rule 68-National Company Law Tribunal Rules, 2016 regulate the conversion of public Company into Private Limited Company. A public company can be converted into the private company only after obtaining its shareholders approval by way of passing of special resolution in general meeting.
[As per Second Proviso of Section 14(1)] For Conversion of Public Company into Private Limited Company foremost requirement is Alteration in Article of Association of Company. According to the Act any alteration having the effect of conversion of a public company into a private company shall not take effect except with the approval of the [Duly notarized copy of the Affidavit.]Tribunal (NCLT) which shall make such order as it may deem fit.
Our team of highly qualified professionals at Ask4compliance.com can help you in Conversion of Public Limited Company to Private Limited Company by completing the necessary procedures as per Companies Act, 2013.