Conversion of Public Ltd to Private company
Process involved in Conversion of Public Ltd to Private
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Board Meetings
Hold a Meeting of board of directors of the public company to consider the proposal of conversion of a public company into a private company and pass necessary board resolution for conversion subject to the approval of Central Government
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Application:
Application for conversion of a public company into a private company is required to be filed in e-Form 1B to the ROC concerned, with all the necessary annexures and with prescribed fee.
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Certificate of corporation
A new certificate of incorporation consequent upon conversion of a public company into private company.
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POST CONVERSION REQUIREMENTS:
Arrange new PAN No. of the company Arrange new stationary with new name of the Company – Update company bank account details intimate all the concerned authorities like Excise and sales tax etc about the status change
Conversion of Public Limited to Private Limited
Process of Conversion of Public Limited into Private Limited Company
1. Convene Board Meeting and approve proposal of conversion of the Public company into a Private
2. Give 21 days’ clear notice for the General Meeting proposing the Special Resolutions with suitable
Explanatory Statement. Section 101 & Section 102 of the Companies Act 2013 and Convene the Extra Ordinary General Meeting.
Document required for Conversion of Public Limited Compnay into Private Limited
File Form No. MGT-14 within 30 days of passing of the resolution
Attachments
1. Notice calling General Meeting
2. CTC of the Special resolution
3. Altered AOA
4. Altered MOA
File Form INC-27 with ROC after approval of MGT-14.
Attachments
1. Notice calling General Meeting
2. Minutes of the General Meeting
3. Altered AOA
Frequently Asked Questions (FAQ's)
. What is a Public Limited Company?
Public company means a company which is not a private company. Public Limited Company a minimum paid-up capital of five lakh rupees or such higher paid-up capital, as may be prescribed.
Who is called Promoter?
An individual or company that, for a fee, helps raise money for some type of investment activity. Most often, promoters raise money for a company through offering investment vehicles other than traditional stocks and bonds, such as limited partnerships and direct investment activities. Often times, these promoters are paid in company stock or free entrance into the investment activity as compensation for their work in raising funds from others.
What is a Private Limited Company?
A company whose ownership is private. A company which has a minimum paid-up capital of one lakh rupees or such higher paid-up capital as may be prescribed, and by its articles. A private company denotes a company of two or more persons, but not exceeding fifty excluding the employees and shareholder
What is a Producer Company?
A producer company is basically a body corporate registered as Producer Company under Companies Act, 1956. Its main activities consists of production, harvesting, processing, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the members or import of goods or services for their benefit. Promoting mutual assistance, welfare measures, financial services, insurance of producers or their primary produce.
What is amount of Stamp Duty for incorporation/ formation of company?
Stamp duty is subject matter of states and depends upon state laws for payment of stamp duties. Separate chart showing stamp duties for incorporation of company in various states of India can be downloaded here.
Feature's of Conversion of Public Ltd to Private
Long-Term Planning
Private companies do not have to plan for the short term as much as publicly traded companies do to satisfy shareholders and keep daily stock prices up.
Limited Liability
The most important advantage" of being a private company is limited liability exposure, This type of limited liability refers to the liability for directors and officers of the company to only lose up to the amount that they invested in the company. Limited liability protects the personal wealth of a private company's shareholders, and does not put personal assets at risk.
