2019 (9) TMI 995 - Tri - Companies Law

Company successfully converts to Private Limited status, meeting all statutory requirements

Sri Narasimha Cotton Press Company Limited Versus Registrar of Companies, Andhra Pradesh

The Tribunal approved the conversion of the Company from a Public Limited to a Private Limited Company based on a Special Resolution passed at the AGM. ... Conversion of the Company from Public Limited to Private Limited Company - Change of name from “Sri Narasimha Cotton Press Company Limited” to “Sri Narasimha Cotton Press Company Private Limited” by addition of the word “Private” before the word “Limited” - HELD THAT:- Since all the requisite statutory compliance having been fulfilled, the conversion of the status of the Company from “Public Limited” to “Private Limited” as per Special Resolution passed at the AGM on 30.09.2017 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, Andhra Pradesh, a certified copy of the order of this Bench in the prescribed e-Form together with a printed copy of the altered MoA and AoA with requisite fee within a period of 15 days in terms of the provisions of Section (2) of Section 14 of the Companies Act, 2013, read with Rule 161, of NCLT, 2016. Petition allowed. Issues:Conversion of Company from Public Limited to Private Limited Company under Section 14(1) of the Companies Act, 2013.Detailed Analysis:1. Background and Petition Details:The Company filed a petition seeking approval for converting from a Public Limited to a Private Limited Company by adding 'Private' before 'Limited.' The Company was incorporated as a Public Company in 1913 with specific business objectives and 79 shareholders. The Board approved the alteration of Memorandum and Articles of Association, leading to a Special Resolution at the AGM on 30.09.2017.2. Reasons for Conversion:The Company aimed to streamline its operations efficiently and economically by converting to a Private Limited Company. The conversion would not affect existing debts, liabilities, or contracts. The Company had no outstanding loans, debts, or legal issues, making it a zero-debt entity with no pending dues to tax departments.3. Statutory Compliance and Notices:The Company fulfilled all statutory requirements under Section 14 of the Companies Act, 2013, and Rule 68 of the NCLT Rules, 2016. Notices regarding the conversion were published in newspapers, and no objections were received from shareholders or creditors. Eighteen shareholders approved the Special Resolution at the AGM.4. Approval and Order:After reviewing the case records and compliance, the Tribunal approved the conversion from Public Limited to Private Limited Company. The change in status was deemed to be in the interest of the Company without prejudicing any stakeholders. The Company was directed to file necessary documents with the Registrar of Companies within 15 days.5. Disposal of the Petition:The Company's petition for conversion was allowed, and the case was disposed of accordingly. The Company was instructed to complete the filing requirements within the specified timeframe to formalize the change in status.In conclusion, the Tribunal approved the conversion of the Company from a Public Limited to a Private Limited Company based on the Special Resolution passed at the AGM, ensuring all statutory requirements were met and stakeholders' interests were safeguarded.