Conversion of Private Company into a Public Company

Section 44 provides for conversion of a private company into a public company. The procedure is:

(1) The company in general meeting must pass a special resolution altering its articles in such a manner that they no longer include the provisions of s.3(1) (iii) which are required to be included in the articles of a private company. On the date of the passing of the resolution, the company ceases to be a private company and becomes a public company.

(2) Within thirty days of the passing of the special resolution altering the articles, the company shall file with the Registrar (1) a printed or type-written copy of the special resolution and (ii) a prospectus or a statement in lieu of prospectus.

If default is made in filing the resolution and the prospectus or the statement in lieu of prospectus, the company and every officer in default shall be liable to a fine upto Rs 5,000 for every day of default.

(3) If the number of members is below seven, steps should be taken to increase it to at least seven whilst the number of directors should be increased to at least three, if there are only two directors.

(4) The word ‘Private’ is to be deleted before the word ‘Limited’ in the name.