Conversion of Public Limited Company to Private Limited Company

Conversion of a Public Limited Company into a Private Limited Company

The conversion of a Public Limited Company into a Private Limited Company has become increasingly common due to the regulatory relaxations available to private companies. This process, governed by the Companies Act, 2013, involves several procedural steps to ensure compliance.

The process for converting a Public Limited Company into a Private Limited Company involves the following key steps:

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1. Board Meeting:

The Board must hold a meeting to determine the time, place, and agenda for the General Meeting of shareholders. The Board will also authorize the Company Secretary or a Director to send out the notice for the meeting.

2. Issuance of Notice for General Meeting:

A Notice for the General Meeting must be sent to all members, directors, and auditors at least 21 days before the meeting, as required under Section 101 of the Companies Act, 2013. The notice must clearly state the date, time, venue, and business to be transacted.

3. General Meeting and Passing of Resolutions:

- Conduct the General Meeting as scheduled.
- Pass the necessary special resolutions, including:
  - Amending the Name Clause in the MOA by removing the word “Public.”
  - Updating the AOA to include private company-specific clauses, such as limiting the number of shareholders to 200 and removing provisions applicable only to public companies (like the ability to invite public subscriptions). These changes should be passed individually, clause by clause.

4. Filing with the Registrar of Companies (ROC):

After the resolutions are passed, file Form MGT-14 with the ROC within 30 days to notify them of the special resolutions.

5. Publishing an Advertisement:

At least 21 days before submitting the application to the Regional Director, the company must publish an advertisement in Form INC-25A. This must appear in both a vernacular newspaper widely circulated in the district and an English-language newspaper circulated in the state where the company is registered.

6. Filing the Application with the Regional Director:

Submit the application for conversion in Form RD-1 to the Regional Director within 60 days of passing the special resolution. Include the prescribed fee and all necessary documents.

7. Submission of Documents to ROC:

Upon approval from the Regional Director, file the approval order along with the revised Articles of Association with the Registrar of Companies for registration.

8. Issuance of New Certificate of Incorporation:

Once the ROC registers the changes, the company will be issued a new Certificate of Incorporation, marking the official conversion from a public to a private company.

This streamlined process simplifies regulatory compliance and enables the company to enjoy the benefits associated with being a private entity.

Feel free to contact us for assistance with the conversion process or any related queries. We are here to guide you through every step of the conversion efficiently.