{"id":6048,"date":"2022-10-11T08:41:00","date_gmt":"2022-10-11T08:41:00","guid":{"rendered":"https:\/\/commerceiets.com\/?p=6048"},"modified":"2022-10-11T08:41:00","modified_gmt":"2022-10-11T08:41:00","slug":"conversion-of-public-company-into-private-company","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/conversion-of-public-company-into-private-company\/","title":{"rendered":"CONVERSION OF PUBLIC COMPANY INTO PRIVATE COMPANY"},"content":{"rendered":"\n

CONVERSION OF PUBLIC COMPANY INTO PRIVATE COMPANY AS PER COMPANIES ACT 2013<\/strong><\/h4>\n\n\n\n

PUBLIC COMPANY<\/h2>\n\n\n\n

According to the Companies Act of 2013, a company that is listed on a stock exchange and is able to offer its securities to the general public is referred to as a public company. The company must launch an IPO in order to become publicly traded. A company that is publicly traded allows its shareholders to easily sell shares on a stock exchange. A publicly-traded company must make its annual report accessible to all stakeholders. In order to grow, a public company must issue more shares to the general public.<\/p>\n\n\n\n

According to Section 2(71) of the Companies (Amendment) Act, 2015 public company’ means:<\/p>\n\n\n\n

(i) A company which is not a private company.<\/p>\n\n\n\n

(ii) has a minimum paid up capital as may be prescribed.<\/p>\n\n\n\n

A company which is a subsidiary of a company, not being a private company, shall be deemed to be a Public Company for the purposes of this Act even where such subsidiary continues to be a private company in its articles.<\/p>\n\n\n\n

Thus, a public company may be said to be an association consisting of not a Private Company within the meaning of the Act. The shares and debentures of a Public Company may be listed on a Stock Exchange and are offered to public for sale.<\/p>\n\n\n\n

PROCEDURE FOR CONVERSION OF PUBLIC COMPANY INTO PRIVATE COMPANY<\/h2>\n\n\n\n

The Conversion of Public Company into Private Company is mentioned in the Companies Act, 2013, and Incorporation of Companies Rules, 2014. The Private Company has less compliance as compared to Public Company to be followed under the Companies Act, 2013. The need for less compliance leads to increase Conversion of Public Company into Private Company. Earlier, the National Company Law Tribunal (NCLT) has the power for the Conversion of Public Company into Private Company now the power has moved to Regional Director.<\/p>\n\n\n\n

The detailed procedure is as follows:<\/p>\n\n\n\n

1. Board resolution for approval for conversion and alteration of memorandum & articles of association with restrictions applicable to a private company u\/s 2(68) and appointment of Attorney.<\/p>\n\n\n\n

2. Special resolution for approval for conversion, alteration of memorandum & articles of association and change of name to add word \u201cPrivate\u201d in the name.<\/p>\n\n\n\n

3. eForm MGT-14 for filing the resolution within 30 days of passing of resolution with Registrar alongwith:<\/p>\n\n\n\n