CONVERSION OF PRIVATE COMPANY INTO A PUBLIC COMPANY
{Se
ction 44}
(1) Special Resolution: The Company in general meeting must pass a special
resolution altering its articles.
(2) Increase in Members/Directors: If the number of members is below seven, steps
should
be taken to increase it to at least seven whilst the number of directors should
be
increased to at least three, if there are only two directors.
(3) The word “Private’’ is to be deleted before the word “Limited’’ in the name.
(4) Within 30 days of the passing of the special resolution altering the ; articles,
the
company shall file with the Registrar (i) a printed or type-written copy of the special
resolution, and (ii) a prospectus or a statement in lieu of prospectus [Sec. 44(a)].
CONVERSION OF PUBLIC COMPANY INTO A PRIVATE COMPANY
(1) Special Resolution: The Company in general meeting must pass a special
resolution
altering its articles.
(2) The word “Private” should be added before “Limited.”
(3) The approval of the Central Government to the alteration in the articles for
converting a public company into a private company should be obtained.
(4) Within one month of the date of the receipt of the order of approval, a printed
copy of the altered articles must be filed with the Registrar.
(5) Within 30 days of the passing of the special resolution, a printed or type-written
copy thereof should be filed with the Registrar.
HOLDING AND SUBSIDIARY COMPANIES
Where a company has control over another company, it is known as the Holding
Company and the company over which control is exercised is called the Subsidiary
Company.
MEMORANDOM OF ASSOCIATION
MEANING AND PURPOSE
The Memorandum of Association of a company is its charter which contains the
fundamental conditions upon which alone the company can be incorporated. It tells us the
objects of the company’s formation and the utmost possible scope of its operations
beyond
which its actions cannot go. Thus, it defines as well as confines the powers of the company.
If anything is done beyond these powers, that will be ultra vires (beyond powers of) the
company and so void
CON TEN TS OF M EM ORAN DOM OF ASSOCIATION
Section 13 requires the memorandum of a limited company to contain: (i) the name
of
the company, with “limited” as the last word of the name in the case of a public company,
and “private limited” as the last words in the case of a private company; (ii) the name of the
State, in which the registered office of the company is to be situated; (iii) the objects of
the
company, stating separately “Main objects” and “other objects”; (iv) the declaration that the
liability of the members is limited; and (v) the amount of the authorized share capital, divided
into shares of fixed amounts.
AL TERATION OF MEM ORAN DUM OF ASSOCIATION
The Name Clause
The Registered Office Clause
The Objects Clause
The Liability Clause
The Capital Clause
The Association Clause
DOCTRIN E OF UL TRA VIRES
If anything is done beyond the powers and objects of the company mentioned in its memorandum that will be
ultra vires the company and so void. Its main object is to protect the interests of the share holders and all others
who deal with the company .
ARTICLES OF ASSOCIATION
Articles of association of a company are its bylaws or rules that may govern the
management of its internal affairs and the conduct of the business
CONTENTS OF ARTICLES OF ASSOCIATION
The articles of a company usually deal with the following matters:
(1) The business of the company.
(2) The amount of capital issued and the classes of shares into which the capital is
divided; the increase and reduction of share capital.
(3) The rights of each class of shareholders and the procedure for variation of their rights.
(4) The execution or adoption of a preliminary agreement, if any.
(5) The allotment of shares; calls and forfeiture of shares for non-payment of calls.
(6) Transfer and transmission of shares.
(7) Company’s lien on shares.
(8) Exercise of borrowing powers including issue of debentures.
(9) General meetings, notices, quorum, proxy, poll, voting, resolution, minutes.
(10) Number, appointment and powers of directors.
(11) Dividends—interim and final—and general reserves.
(12) Accounts and audit.
(13) Keeping of books—both statutory and others.
AL TERATION OF ARTICL ES OF ASSOCIATION
1. The alteration must not exceed the powers given by the memorandum of
association
2. The alteration must not be inconsistent with any provision of the Companies Act,
For example, no company can purchase its own shares
3. The alteration must not be illegal
4. The alteration must not be inconsistent with and order of the court.
5. The alteration should not be fraud on minority
