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2019 (5) TMI 390 - Tri - Companies LawAlteration of Articles of Association - change of status of the Company from 'Public Limited Company' to 'Private Limited Company' - HELD THAT - Having regard to the facts and circumstances of the above case and 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 16.03.2018 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 of the creditors of the Petitioner Company. The Petitioner is hereby directed to file with the Registrar of Companies, Hyderabad, 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 Involved:
1. Approval sought for conversion of a Public Limited Company to a Private Limited Company under Section 14(2) of the Companies Act, 2013 read with Rule 68 of NCLT Rules, 2016. Detailed Analysis: 1. Conversion of Company Status: The Company filed a petition seeking approval for the conversion from a Public Limited Company to a Private Limited Company. The Board of Directors approved the alteration of the Articles of Association, and an Extraordinary General Meeting (EoGM) was held to obtain consent for the conversion. The resolution passed at the EoGM was in compliance with the Companies Act, 2013, and other applicable provisions. 2. Company Background and Share Capital: The Company was initially incorporated as an unlisted Public Company Limited by shares. The authorized share capital, issued, subscribed, and paid-up share capital were detailed. The Board of Directors approved the alteration of the Articles of Association, leading to the decision to convert the Company into a Private Limited Company. 3. Compliance and Affidavit Filing: The Company complied with the direction to publish an advertisement in newspapers and serve notices to relevant authorities. The Registrar of Companies confirmed the Company's compliance with filing returns and absence of any prosecution against the Company and its Directors. 4. Legal Provisions for Conversion: Section 14 of the Companies Act, 2013 allows for the alteration of articles for conversion, subject to certain conditions and approval from the Tribunal. Rule 68 of the NCLT Rules, 2016 outlines the procedure for filing a petition for conversion, which the Company followed in this case. 5. Approval and Compliance Check: The Board Resolution for conversion was duly passed, and the EoGM unanimously approved the conversion resolution. The Company fulfilled the requirements of Rule 68 of NCLT Rules, 2016 by publishing notices and receiving no objections from members or creditors. 6. Final Approval and Directions: Considering the compliance and fulfillment of statutory requirements, the Tribunal approved the conversion of the Company from a Public Limited Company to a Private Limited Company. The order directed the Company to file necessary documents with the Registrar of Companies within a specified timeframe. In conclusion, the Tribunal approved the conversion of the Company's status from a Public Limited Company to a Private Limited Company based on the compliance with legal provisions, approval from the Board of Directors and shareholders, and absence of objections from relevant parties. The detailed analysis covered the Company's background, share capital structure, compliance with filing requirements, legal provisions for conversion, approval process, and final directions for document filing post-approval.
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