The compliances of a public company are much more stringent in comparison to a private company. There are also certain other benefits/ exemptions enjoyed by a private company over a public company, such as Exemption from rotation of directors, no requirement of minimum paid up capital in private limited company, mandatory requirement of appointment of Managing Director, Chief Executive Officer (CEO), Manager, Whole-time Director, Chief Finance Officer (CFO) is not applicable on private limited company. Lesser compliances coupled with certain other benefits/ exemptions provided to private limited companies result in management of public limited companies deciding to convert into private limited companies. Certain relevant queries in connection with the same have been dealt below.
1. What are some key/ basic benefits of the conversion of Public Limited Company into a Private Limited Company?
- The Compliance requirements of the private limited companies are less as compared to Public Limited Companies
- There are restrictions on withdrawal of remuneration by the Directors of a Public Limited Companies whereas as no such restrictionsare there in case of Private Limited Companies.
- There is exemption from rotation of directors in private limited company,
- There is no requirement of minimum paid up capital in private limited company,
- Mandatory requirement of appointment of Managing Director, Chief Executive Officer (CEO), Manager, Whole-time Director, Chief Finance Officer (CFO) is not applicable on private limited company
2. What are some key/basic documents required for conversion of a Public Limited Company into a Private Limited Company?
- Copy of Altered Memorandum of Association (MOA) & Article of Association (AOA)
- Notice of calling Extra-ordinary General Meeting (EGM)
- Minutes of Extra-ordinary General Meeting (EGM)
- Extract of Special Resolution passed in Extra-ordinary General Meeting (EGM)
- List of shareholders & Directors
- KYC documents of all directors
- Registered office address proof, Rent Agreement & NOC from the owner of Registered office address
- Copy of latest Income Tax Return
- List of all Creditors along with their consent for conversion
- Statement of Assets and Liabilities of the Company duly certified as true and correct by the Auditor
- NOC from the Registrar of Companies
- Newspaper Advertisements in form INC 25A in one English & one Vernacular language in the State in which the registered office address is situated
- To Convene an EGM and pass a Special Resolution for Conversion
- Preparation of DSC and DIN if required
- Preparation and Filing e-form MGT 14 for registration of Special Resolution
- Preparation and Filing of e-form RD-1
- Newspaper Advertisement as mentioned above
- Preparation and Filing of e-form MGT 27 along with above mentioned documents for conversion
- Preparation and Filing of e-form 28 to ROC
- Appropriate Government fees is payable depending upon the authorized capital of the company.
4. What is the time period within which the process of conversion of a Public Limited Company into a Private Limited Company takes place?
5. How Legal Terminus can help you to convert a Public Limited Company into a Private Limited Company?
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