ARTC1075 - Taxpublishers.in

SUBSCRIBE FOR FULL CONTENT


The Tax Publishers Conversion of Public Company into a Private Company : Technical Aspects Narendra Kumar The basic difference that can be seen between private and public company is ease of doing business in former one as it is provided with lesser government interruptions and more privileges and exemptions when compared to the latter. This write up seeks to explain technicalities regarding conversion of public company into a private company. 1. Introduction In view of the privileges and relaxations provided to private companies and limitations of doing business as a public company; generally public company opt to convert itself into a private company. Conversion of public company into private one requires alteration in Memorandum and Articles by passing special resolution subject to approval of the Tribunal. Provisions regarding conversion of a public company into a private company are enshrined under sections 13, 14 and 18 of the Companies Act, 2013 read with rule 33 of the Companies (Incorporation) Rules, 2014. 2. Manner of conversion into private company As conversion into a private company requires the addition of word private, such alteration in name demands alteration in Memorandum of Association (MoA) and further, alteration in Articles of Association (AoA) for inserting restrictions along with approval of the Tribunal. Also, by virtue of section 18(1), public company registered under Companies Act, 2013 is allowed to be converted into a private company by alteration of MoA and AoA in accordance with the provisions of Chapter II. Following are the steps to convert a public company into a private company: SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Conversion of Public Company into a Private Company : Technical Aspects

Narendra Kumar

The basic difference that can be seen between private and public company is ease of doing business in former one as it is provided with lesser government interruptions and more privileges and exemptions when compared to the latter. This write up seeks to explain technicalities regarding conversion of public company into a private company.

1. Introduction

In view of the privileges and relaxations provided to private companies and limitations of doing business as a public company; generally public company opt to convert itself into a private company. Conversion of public company into private one requires alteration in Memorandum and Articles by passing special resolution subject to approval of the Tribunal. Provisions regarding conversion of a public company into a private company are enshrined under sections 13, 14 and 18 of the Companies Act, 2013 read with rule 33 of the Companies (Incorporation) Rules, 2014.

2. Manner of conversion into private company

As conversion into a private company requires the addition of word private, such alteration in name demands alteration in Memorandum of Association (MoA) and further, alteration in Articles of Association (AoA) for inserting restrictions along with approval of the Tribunal. Also, by virtue of section 18(1), public company registered under Companies Act, 2013 is allowed to be converted into a private company by alteration of MoA and AoA in accordance with the provisions of Chapter II. Following are the steps to convert a public company into a private company: