Question

state the different ways of converting private company into public company?

Answer 1

Answer:

Issue notice by following the provisions of section 173(3) of the Companies Act, 2013, for convening a meeting of the Board of Directors.

• Pass a board resolution to get the approval of Directors for the conversion of a private company into a public company by altering the AOA.

• Fix date, time and place for holding Extra-ordinary General meeting (EGM) to get the approval of shareholders, by way of Special Resolution, for the conversion of a private company into a public company.

• To approve the notice of EGM along with Agenda and Explanatory Statement to be annexed to the notice of General Meeting as per section 102(1) of the Companies Act, 2013.

• To authorise the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM) as approved by the board under clause 1

Answer 2

Three main ways to convert private company

Explanation:

1. Default conversion :

A private company complies with the legal requirements set out in the Companies Act (i.e., if its membership reaches fifty, it requires the free transfer of stock, or it encourages the public to contribute to its securities or debentures, it necessarily will be a public corporation.

2. Change to be considered public corporation through Operation of Law or Private Corporation:

Private enterprises are removed from the application of several provisions of a Companies Act and possess these benefits primarily on the basis that they are private issues that are not of particular interest to the public.

3. Conversion by Choice:

A private firm may want to become a public corporation, purposely. If a private company deletes the criteria from its Papers of Connection by passing a special solution, the company will simply continue to be a private business from the date that the Articles of Connection are amended.

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