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Convertion

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Submitted By Amir47
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Conversion of a Public Company into a Private company:
Under the Companies Act (Section31), all public companies, whether originally incorporated as a public limited company or at any time converted into a public limited company (under section 44 of the Act), may be converted into a private limited company, if the members so desire. The essential conditions for such a conversion are:- * The company must not be listed on any recognised stock exchange. In case of a listed company,it will have to wait for atleast one year after its delisting.

* Shareholders' approval by special resolution for alteration of Articles of Association for incorporation of the definition of a private company. The Articles shall be suitably amended to include the basic restrictions applicable on a private company and other provisions necessary thereto.

* No resolution amending the Articles, which has the effect of converting a public company into a private company, shall be effective unless it has been approved by the Central Government.

* After the alteration has been approved, a printed copy of the Article shall be filed with the Registrar of Companies within one month of the date of receipt of the order of approval.

* The name of the company shall be amended to include the word 'private' on all its documents.
The Companies Act contains the following procedure for the conversion:- * Convene a Board meeting for consideration of the proposal of conversion of the company into a private company.

* Prepare the proposal for alteration of Articles of Association or prepare a new set of Articles of Association meeting the requirements of a private limited company.

* Hold the Board meeting and get approval of the Board for the proposal, fix up the day, date and time of holding the general meeting of the company, approve notice and explanatory statement and authority

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