Company conversion

WHAT ARE THE INSTANCES THAT REQUIRES TO CONVERT PUBLIC TO PRIVATE:

FOLLOWING ARE SOME THE INSTANCES ON OCCURANCE OF WHICH PUBLIC TO PRIVATE CONVERSION ARISES.

1) WHEN NUMBER OF DIRECTORS DECREASES THE MINIMUM NUMBERS REQUIRED TO MAINTAIN BY PUBLIC LIMITED.

2) WHEN COMAPANY CANT HANDLE THE COMPLIANCES BURDEN

3) WHEN THE SCALE OF BUSINESS DECREASES

4) WHEN COMPANY DELSIT ITS SHARES

5) WHEN COMPANY WANTS TO LIMIT THE SHAREHOLDING

PROCEDURE:

1. HOLD THE BOARD MEETING as per the provisions of Section 173, applicable Secretarial Standards and other applicable provisions of Companies Act, 2013 to discuss and approve the agenda of conversion and to recommend the same for approval of Shareholders, To approve the alteration of Memorandum and Articles and to recommend the same for approval of Shareholders, To fix the date, time and place of general meeting of Shareholder, To approve the draft notice along with Explanatory Statement of the general meeting and to authorise Company Secretary or any other person to issue the Notice of General Meeting as per provisions of Companies Act and Secretarial Standards.
2. ISSUE THE NOTICE OF GENERAL MEETING at least 21 clear days before the General Meeting.
3. HOLD GENERAL MEETING and pass the special resolutions under Section 13 & 14 to approve the conversion of Public Company into Private Company, Approve the Alteration of Memorandum of Company to comply with the provisions of Section 2 (68). Approve the Alteration of Articles of the Company to comply with the provisions of Section 2 (68).
4. File Form MGT-14in compliance with the provisions of Section 117 (3) within 30 days of passing of Special Resolutions in the General Meeting and attach the following Documents with MGT-14.

Attachments of Form MGT-14

1. 1. Certified true copy of the Resolution passed with Explanatory Statement.
   2. A Signed Copy of Notice of the General Meeting with all annexures
   3. Signed and Stamped Altered copy of Memorandum and Articles of the Company.
2. DRAFT AN APPLICATION for Conversion of Public Company into Private Company to be filed to Regional Director. Following Particulars shall be set out in the Application:

• The date of the Board meeting at which the proposal for alteration of Memorandum and Articles was approved;
• The date of the general meeting at which the proposed alteration was approved;
• Reason for conversion into a private company;
• Effect of such conversion on shareholders, creditors, debenture holders, deposit holders and other related parties;
• Details of any conversion made within last five years and outcome thereof along with copy of order;

1. ADVERTISEMENT: At least twenty one days before the date of filing of the application advertise in the Form No. INC-25A, in a vernacular newspaper in the principal vernacular language in the district and in English language in an English newspaper, widely circulated in the State in which the registered office of the company is situated.
2. At least TWENTY ONE DAYS before the date of filing of the application serve, by registered post with acknowledgement due, individual notice on each debenture holder and creditor of the company and a notice to the Regional Director and Registrar and to the regulatory body, if the company is regulated under any law for the time being in force.
3. File Form RD-1within 60 days of passing of Resolution with Regional Director along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 with following attachments

Attachment of RD-1

• Signed Copy of Application
• Draft copy of Altered Memorandum of Association and Articles of Association.
• Copy of the MINUTES of the general meeting with details of votes cast in favor and or against with names of dissenters
• Copy of Board resolution dated not earlier than THIRTY DAYS authorizing to file application for such conversion
• Scanned, Signed and Stamped Copy of ADVERTISEMENTS as mentioned in Point No. 6.
• DECLARATION by KMP (If no KMP in the Company by any of the Directors) that The company limits the number of its members to two hundred, no deposit has been accepted by the Company in violation of the Act and rules made thereunder, There has been no non-compliance of sections 73 to 76A, 177, 178, 185, 186 and 188 of the Act and rules made thereunder, no resolution is pending to be filed in terms of sub-section (3) of section 179 and, The Company was never listed in any of the Regional Stock Exchanges and if was so listed, all necessary procedures were complied with in full for complete delisting of the shares in accordance with the applicable rules and regulations laid down by Securities Exchange Board of India.

Other Mandatory Attachments:

1. LIST OF CREDITORS, DEBENTURE HOLDERS, of a date NOT MORE THAN 30 DAYS before the filing of Application with Regional Director, setting forth the following details:

• Name and Address of every creditor and debenture holder
• Nature and amounts due to them in respect of debts, claims or liabilities

In respect of any contingent or unascertained debt, the value, so far as can be justly estimated of such debt or claim

1. The Company shall file AN AFFIDAVIT, signed by the Company Secretary of the Company, if any, and not less than two directors of the company, one of whom shall be managing director, where there is one, to the effect that they have made a full enquiry into affairs of the company and, having done so, have formed an opinion that the list of creditors and debenture holders is correct, and that the estimated value as given in the list of the debts or claims payable on contingency or not ascertained are proper estimates of the values of such debts and claims that there are no other debts, or claims against, the company to their knowledge
2. Proof of Serving the Notice to all Creditors, Debenture holders, Registrar and other Regulatory Bodies

If any objection is received from any person in response to the advertisement or notices mentioned above, the Company shall submit the copy of Objection with the Regional Director

1. Where objection is received the regional director will call the person who raised objection and to the Company (any Representative on behalf of the Both) for hearing and after giving proper opportunity to being heard, the regional director will take the decision.
2. Where the Regional Director on examining the application finds it necessary to call for further information or finds such application to be defective or incomplete in any respect, he shall within thirty days from the date of receipt of the application, give intimation of such information called for or defects or incompleteness, directing the person or the company to furnish such information, to rectify defects or incompleteness and to re-submit such application within a period of FIFTEEN DAYS in e-Form No. RD-GNL-5
3. In cases where such further information called for has not been provided or the defects or incompleteness has not been rectified to the satisfaction of the Regional Director within the period allowed i.e. FIFTEEN DAYS, the Regional Director shall reject the application with reasons within thirty days from the last date up to which resubmission was required to be made or from the date of last re-submission made as the case may be.
4. If No Objection is received or Objection received then after complying with the decision of Regional Director as given above in point 10, and the application is complete in all respects, the same may be put up for orders and the concerned Regional Director shall pass an order approving the application within thirty days from the date of receipt of the application or the date of last resubmission made, as the case may be.
5. Obtain certified copies of the order of Regional Director
6. File E-form INC-28with ROC within 30 days of confirmation of shifting by Regional Director along with certified copy of the order of Regional Director