Conversion of Public Company into a Private Company

There is no direct or express provision in the Act for the conversion of a public company into a private company except a reference in the proviso to s.31(1). A public company having a share capital and membership within the limits imposed upon private companies by s.3(1) (iii), may become a private company by following the procedure as given below:

(1) The company in general meeting has to pass special resolution for altering the articles so as to include therein the necessary restrictions, limitations and prohibition and to delete any provision inconsistent with the restrictions. For instance, a private company has to put certain restrictions on the right of members to transfer their shares.

(2) The word ‘Private’ should be added before ‘Limited’.

(3) The approval of the Central Government to the alteration in the articles for converting a public company into a private company should be obtained.

(4) Within one month of the date of the receipt of the order of approval, a printed copy of the altered articles must be filed with the Registrar.

(5) With thirty days of the passing of the special resolution, a printed or type-written copy thereof should be filed with the Registrar.