Conversion of Companies - Online Process
As per the provision of the Companies Act, any company registered under this Act are eligible to convert into any other type of company after complying the provisions of this Act. For conversion company shall make an application to the registrar and submit the necessary documents along with fees to the ROC.
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Conversion of Companies
As per the provision of the Companies Act, any company registered under this Act are eligible to convert into any other type of company after complying the provisions of this Act. For conversion company shall make an application to the registrar and submit the necessary documents along with fees to the ROC. After that ROC consider the application and documents submitted along with an application and if satisfied then issue of incorporation for this purpose.
For conversion of public company into private company, it shall require to comply the following procedure-
1.An application shall be filed with regional director (RD) in e-form RD-1 within 60 days of passing SR. Following documents should be attached along with application:
a.Draft copy of MOA and AOA.
b.Copy of minutes of general meeting at which SR is passed
c.Copy of board resolution or power of attorney
d.Declaration by KMP/Director that the provision of section 2(68) complied and no resolution is pending as per section 179(3).
e.List of creditors and debenture holders drawn up to the latest date preceding the date of filing of application by not more than 30 days, along with affidavit which should be signed by the CS, if any or by at least two directors one of whom should managing director.
2.At least 21 days before making application, company shall advertise, notice of conversion in two newspaper; or serve individual notice to each debenture holder and creditor; or serve notice to regional director (RD), registrar and to the regulatory body (if any) for receiving the objection.
3.If no objection is received then application shall put for order without hearing and RD pass order within 30 days of application. If objection received then RD examining the application and hold hearing within 30 days and direct the company to file an affidavit. Regional director shall within 30 days of hearing pass an order either reject or approve the application or if failing it shall be deemed to be approved.
4.After obtaining approval company shall reduce their number of members up to 200, number of directors up to 2 and include the restriction and prohibition of section 2(68) in their articles.
5.Surrender old certificate of incorporation (COI) and obtained new certificate of incorporation (COI).
6.Inform in newspaper about the conversion of public company.
7.Arrange new common seal and approve in board meeting.
- Private company other than section 8 company, whose paid up share capital is fifty lakhs rupees or less; or average annual turnover is less than two crores rupees as the case may be then private company may convert into OPC.
- Obtain no objection in writing from the existing members & creditors while passing special resolution in general meeting.
- File special resolution in Form MGT-14 within 30 days of passing special resolution.
- File necessary documents along with fees, such as-
- The directors of the company shall give a declaration by way of affidavit duly sworn in confirming that all members and creditors of the company have given their consent for conversion, the paid up share capital company is fifty lakhs rupees or less or average annual turnover is less than two crores rupees, as the case may be.
- The list of members and list of creditors.
- The latest audited balance sheet and profit and loss account.
- The copy of non-objection certificate of secured creditors.
5.ROC issue certificate of incorporation after checking the form and necessary documents file along with form and satisfy that private company complied the prescribed requirements of conversion into OPC.
There are two types of conversion of One Person Company (OPC) into private company i.e. voluntary conversion and compulsory conversion.
a.
Voluntary Conversion:In voluntary conversion, an OPC cannot convert voluntarily into private company unless two years have expired from the date of incorporation of One Person Company, except threshold limit (paid up share capital) is increased beyond Rs.50 lakhs or its average annual turnover during the relevant period exceeds Rs.2 crores i.e., if the Paid-up capital of the Company crosses Rs.50 lakhs or the average annual turnover during the relevant period exceeds Rs.2 crores, then the OPC has to invariably file forms with the ROC for conversion into a private company, with in a period of six months on breaching the above threshold limits.
OPC has to communicate voluntary conversion to a registrar of companies in form INC 5 within sixty days.
For converting OPC to a private limited company, OPC is required to have 2 directors and 2 members.
b.
Compulsory Conversion:- In compulsory conversion, An OPC compulsorily convert into private company, when the threshold limit (paid up share capital) is increased beyond Rs.50 lakhs or its average annual turnover during the relevant period exceeds Rs.2 crores i.e., if the paid-up capital of the company crosses Rs.50 lakhs or the average annual turnover during the relevant period exceeds Rs.2 crores.
- One person company make an application to ROC for conversion in Form INC-6.
For conversion, private company into public company, it shall require to comply the following procedure:
- Conduct board meeting for discussing the agenda items:
- To approve conversion of company into public company subject to approval of shareholders.
- To adopt new set of memorandum of association (MOA) subject to approval of shareholders.
- To adopt new set of article of association (AOA) subject to approval of shareholders.
- Fix date, time and venue for conducting extraordinary general meeting (EGM).
2.Issue notice of general meeting at-least 21 days clear days before the meeting to the members, or in case notice is given less than 21 days then meeting conducted in shorter notice by taking approval of more than 95% of shareholders entitled to vote.
3.Conduct general meeting for passing special resolution and for new MOA & AOA
4.Fileform MGT-14 within 30 days of passing special resolution.
5.File form-INC-27 within 15 days of passing special resolution with registrar of companies along with following attachments.
- Minutes of the general meetings (EGM/ AGM) of the members.
- Certified true copy of special resolution.
- Copy of altered MOA and AOA.
- SRN of form MGT-14 is required to fill in form INC-27.
6.After approval of e-Form MGT -14 and form-INC-27, if the registrar of companies (ROC) satisfied that private company complied the prescribed requirements of conversion, it will issue the fresh certificate of incorporation and will cancel the former registration of company.
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Basic Features to Read before starting private limited company
Private company is required to add the word “Private limited” or “Pvt. Ltd.” to end of its name. Private company should have at least two member and two directors. Private company have right to issue debentures to any number of persons.
Features of Public Limited Company
MCA provides the facility for incorporation of public limited company. For incorporation, firstly apply for name through RUN (Reserve Unique Name) on MCA portal. After availability of name from ROC we should file incorporation form i.e. Spice 32, INC 33(for eMOA), INC 34(for eAOA), .