Whether two separate application fees required for reversion to status of private company - Companies Law - No. 11/72

Circular : No. 11/72 [32/1/72 ‑ CL ‑ III], dated 19 ‑ 5 ‑ 1972. Subject:- Whether two separate application fees r equired for reversion to status of private company Question has been raised whether in the case of a company which having become a public company by virtue of the provisions of section 43A(1) approaches the Company Law Board for obtaining approval under section 43A(4) for a reversion to the status of a private company, two applications to the Central Government ‑ one under section 43A(4) and the other under section 31(1) ‑ with two separate application fees are required under the aforesaid provisions of the Companies Act or a single application fee is sufficient for the purpose. The issue has been examined by the Company Law Board in consultation with the Ministry of Law and the Board has been advised that any company which becomes a public company by virtue of the provisions of section 43A(1) can convert itself into a private company after obtaining the approval of the Central Government under section 43A(4). Once the Central Government has granted its approval to convert a public company into a private one under section 43A(4), there is nothing left for further approval under section 31(1). Therefore, in such cases an application by the company under section 43A(4) is only required and the question of two applications accompanied by two application fees does not arise. Before making the said application the company should amend its articles of association, if necessary, so as to incorporate the requirements of section 3(1)(iii). This amendment will be necessary in those cases of companies which during their existence as a public company under section 43A(1) chose to get those clauses of the articles of association deleted, which had conformed to the requirements of section 3(1)(iii), instead of retaining them under the proviso to section 43A(1). As for the obligation of companies in such cases to reinsert the said clauses in the articles of association in order that they might be regarded as private companies after their application under section 43A(4) is allowed, the said obligation may be fulfilled with the passing of a special resolution in pursuance of section 31, but no approval of the Central Government is required in that regard, because the special resolution would precede and be a step‑in‑aid of the application under section 43A(4). This means that the requirement of the Central Government s approval under the proviso to section 31 is solely applicable to the category of public companies which, by the terms of their incorporation or by direct conversion (i.e., without intervention of section 43A) from private to public, have assumed the status of public companies and which seek to attain or recover the status of private companies.