Question

ABC Private Limited Company choose to convert itself into a Public Company. It can do so by altering its Memorandum of Association and Articles of Association and by passing

ABC Private Limited Company choose to convert itself into a Public Company. It can do so by altering its Memorandum of Association and Articles of Association and by passing

.

Option A: Ordinary Resolution
Option B: Special Resolution
Option C: Board Resolution
Option D: None of these

Correct Answer

Option: b

Explanation

By complying with the following requirements, a Private company can be – converted in to public company.- Alteration of its Articles of Association, thereby deleting the three restrictions of a Pvt company, as per Section 14 by passing a Special Resolution, Altering its name thereby removing the word ‘Private’ from its name, as per Section 13 by passing Special Resolution; Moreover, steps should be taken to increase the number of members to at least 7 if the number of members is below 7, and if there are only 2 directors that the number of directors should be increase to at least 3. The company turns out to be public under Section 14 from the date of passing Special Resolution However, the change in its name, by deleting the word ‘Private’ becomes in eftect only on the issue of fresh incorporation certificate by the ROC Section 14 of the Companies Act, 2013 deals with Alteration of articles. Sub-Section (1) of Section 14 provides that Subject to the provisions of this Act and the conditions contained in its memorandum, if any, a company may, by a special resolution, alter its articles including alterations having the effect of conversion of- (a) a private company into a public company Section 13 of the Companies Act, 2013 deals with Alteration of memorandum Sub-Section (2) of Section 13 provides that Any change in the name of a company shall be subject to the provisions of sub-sections (2) and (3) of Section 4 and shall not have effect except with the approval of the Central Government in writing: Provided that no such approval shall be necessary where the only change in the name of the company is the deletion therefrom, or addition thereto, of the word “Private”, consequent on the conversion of any one class of companies to another class in accordance with the provisions of this Act.

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