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2017 (6) TMI 740 - Tri - Companies LawConversion of the status of the Company from a Public to a Private Limited Company - alteration of AOA - Special Resolution passed at the Extra-ordinary General Meeting - change of status of the Company - Held that - Since all the requisite statutory compliances having been fulfilled, the conversion of the status of the Company from Public Limited to Private Limited as per Special Resolution passed at the EOGM on 14.06.2016 is hereby approved in the interest of the Company and such change of status of the Company shall not cause any prejudice either to the Members or the Creditors of the petitioner Company. C.P. No. 47/2017 is accordingly allowed as disposed of. The Petitioner Company shall comply with the conditions as mentioned in the communication dated 22.03.2017 from RBI, DNBS, Kolkata. The petitioner is hereby directed to file with the Registrar of Companies, West Bengal, a certified copy of the order of this Bench in the prescribed e-form together with a printed copy of the altered Articles of Association as also with requisite fee within a period of 15 days in terms of the provision of section (2) of section 14 of the Companies Act, 2013 read with Rule 161 of NCLT Rules, 2016
Issues:
1. Conversion of a Public Limited Company to a Private Limited Company under Section 14 of the Companies Act, 2013. Analysis: The judgment pertains to a petition filed seeking approval for the conversion of a Public Limited Company to a Private Limited Company by altering the Articles of Association. The company, engaged in financial services, decided to convert to a Private Limited Company for compliance formalities and to avail privileges under the Companies Act, 2013. The Board of Directors approved the conversion, and a Special Resolution was passed at an Extra-ordinary General Meeting (EOGM) held on 14.06.2016. The legal framework under Section 14 of the Companies Act, 2013 allows a company to alter its articles, including conversion, by a Special Resolution. The second proviso to Section 14(1) mandates Tribunal approval for conversion from Public to Private Company. Rule 68 of the NCLT Rules, 2016 outlines the procedure for such conversions, requiring compliance with specified requirements. Upon reviewing the case record and submissions, the Tribunal found that all necessary steps were followed. The Special Resolution was duly passed, filed, and approved by the Registrar of Companies. The company had published notices, obtained a 'No Objection Certificate' from the Reserve Bank of India, and fulfilled other statutory obligations. Considering the compliance with Rules 68 of NCLT Rules, 2016 and the absence of objections, the Tribunal approved the conversion from Public Limited to Private Limited Company. It was noted that the change in status would not prejudice the members or creditors of the company. The petitioner was directed to file the order with the Registrar of Companies and comply with RBI's conditions within the specified timeline. In conclusion, the Tribunal approved the conversion in the interest of the company, ensuring all legal requirements were met. The judgment emphasizes adherence to statutory provisions, shareholder approval, and regulatory compliance in effecting such conversions.
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