How registered companies are converted into their another class? (With Some Conversion Procedure).
Updated: Aug 27, 2019
Under SECTION 18 of the companies act, 2013 - A company of any class registered under the Act may convert itself as a company of other class under this Act by alteration of memorandum and articles of the company.
BARE ACT - SECTION 18. Conversion of companies already registered.
(1) A company of any class registered under this Act may convert itself as a
company of other class under this Act by alteration of memorandum and articles of the
company in accordance with the provisions of this Chapter.
(2) Where the conversion is required to be done under this section, the Registrar shall
on an application made by the company, after satisfying himself that the provisions of this
Chapter applicable for registration of companies have been complied with, close the former
registration of the company and after registering the documents referred to in sub-section
(1), issue a certificate of incorporation in the same manner as its first registration.
(3) The registration of a company under this section shall not affect any debts, liabilities,
obligations or contracts incurred or entered into, by or on behalf of the company before
conversion and such debts, liabilities, obligations and contracts may be enforced in the
manner as if such registration had not been done.
Procedure for Converting Private Limited Company to One Person Company (OPC)
To START the process of converting a private limited company into a OPC, a Board Meeting must be conducted to get in-principal approval of the Directors and fix date, time and place for conducting Extra-Ordinary General Meeting (EGM) to obtain the approval of the shareholders of the private limited company by means of a special resolution. A support notice of EGM along with Agenda and Explanatory Statement should be annexed to the notice of General Meeting according to the Companies Act, 2013. Further, a Director or Company Secretary should issue Notice of the Extra-ordinary General meeting (EGM) as permitted by the Board. The Notice of the Extra-ordinary General Meeting (EGM) should be issued to all Members, Directors and the Auditors of the company.
As called for in the notice, the Extra-ordinary General meeting (EGM) must be conducted on due date and the special resolution for conversion of private limited company into One Person Company (OPC) must be passed.
After passing the special resolution, the company must file the special resolution passed by shareholders for conversion of private limited company into One Person Company (OPC) with the associated Registrar of Companies. Hence, file form MGT-14 within a period of 30 days of passing of special resolution with the relevant Registrar of Companies, with approved fees and along with subsequent attachments.
Procedure for Converting company limited by guarantee to limited by shares
change the name of the existing company so that it may be used for the new one
register the new company as a company limited by shares
the two companies approve a contract between them under which all or some of the assets and all or some of the liabilities are transferred from one company to the other. Care must be taken with this as the contract will be a substantial property transaction in which all the directors of both companies are interested. See directors' conflicts of interest for more information.