Keeping in view the relaxation provided to a Private Limited company, many companies have converted into Private Companies or in the process of such conversion, to take the benefits of relaxation provided to Private limited.
Conversion of Public Company into Private Company are given in Section 18 and 14 of the Companies Act, 2013 read with Rule Section and Rule 33 of Companies (Incorporation) Rule, 2014. E-form INC-27 is required to file for this conversion pursuant to section 44 and Rule 33. Section 18 of the Companies Act, 2013 allow an existing Company to convert itself as a company of other class by altering its Memorandum and Article of Association in manner prescribed in chapter II of the Companies Act, 2013. Note: By Companies (Amendment) Ordinance, 2018, Power of Tribunal has been transferred to Central Government. Therefore, after notification of ordinance Public Company can be converting into Private Company with approval of Central Government and Power of Central Government assigned to Regional Director for approval of conversion of public limited company into private limited company.
What are the advantages of converting from Public Limited to a Private company?
The conversion of Public Company into Private Company makes it easier to meet compliance and regulatory provisions and exercise greater control. For instance, a private company does not need to hold a meeting of shareholders and pass a special resolution to do related-party transactions. These following exemptions made available through the notification to private limited 1. Related party transactions
2. Share capital
3. Public deposits
4. Meeting Requirements
5. Agreements and resolutions
6. The auditor eligibility
8. Power of the board
9. Senior Management Appointment
What are the post conversion formalities?
After conversion of Public Company into a Private Company kindly take care of the following points:
1. Intimate all the concerned authorities like GST department, Excise, and sales tax etc. about the status change.
2. Arrange new PAN No. of the company. Update company bank account details.
3. Arrange new stationary with new name of the Company.
4. Analyze your newly adopted AOA and MOA and remove all things which are in contradiction with the conditions of AOA
Draft MOA, AOA and other documents as required by law
Collect signed documents
Prepare form MGT-14 and RD-1 and submit with concern department
To prepare Form INC-28 after getting approval from Regional Director and submit with concern department with all necessary attachments as required by law.
To receive fresh certificate of incorporation from the ROC to give effect to the conversion process.