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Converting a public company into a private company requires a special resolution.
- a)Passed by the members and with sanction of the central Government.
- b)Passed by the members and approved by the Registrar of companies.
- c)Passed by the members and approved by the company Law Tribunal.
- d)Passed by the members and approved by the auditors.
Correct answer is option 'A'. Can you explain this answer?
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Converting a public company into a private company requires a specialr...
Converting a public company into a private company requires a special resolution passed by the members and with the sanction of the central government. Let's understand the process in detail:
1. Special Resolution:
A special resolution is a resolution passed by the members of a company at a general meeting with a specific majority, usually not less than 75% of the votes cast. In the case of converting a public company into a private company, a special resolution is required to be passed by the members.
2. Members' Approval:
The special resolution must be passed by the members of the public company, indicating their agreement to convert the company into a private company. The members, who are the shareholders of the company, have the authority to make decisions regarding the company's structure and operations.
3. Central Government Sanction:
Once the special resolution is passed by the members, it needs to be sanctioned by the central government. The central government's approval is necessary to ensure that the conversion is in compliance with the applicable laws and regulations.
Procedure for Central Government Sanction:
To obtain the central government's sanction, the following steps are typically followed:
- Filing of Form MGT-14: The company needs to file Form MGT-14 with the Registrar of Companies (ROC) within 30 days of passing the special resolution. This form contains the details of the resolution and other relevant information.
- Application to the Regional Director: Along with the filing of Form MGT-14, an application needs to be made to the Regional Director (RD) in Form RD-1. The application should include the reasons for conversion and the proposed changes in the company's Memorandum of Association (MoA) and Articles of Association (AoA).
- Approval by the Central Government: The RD examines the application and submits a report to the central government. Based on the report and other relevant factors, the central government grants the sanction for the conversion.
Conclusion:
Converting a public company into a private company requires the passing of a special resolution by the members and obtaining the sanction of the central government. This process ensures that the conversion is carried out in accordance with the legal framework and regulatory requirements.
1. Special Resolution:
A special resolution is a resolution passed by the members of a company at a general meeting with a specific majority, usually not less than 75% of the votes cast. In the case of converting a public company into a private company, a special resolution is required to be passed by the members.
2. Members' Approval:
The special resolution must be passed by the members of the public company, indicating their agreement to convert the company into a private company. The members, who are the shareholders of the company, have the authority to make decisions regarding the company's structure and operations.
3. Central Government Sanction:
Once the special resolution is passed by the members, it needs to be sanctioned by the central government. The central government's approval is necessary to ensure that the conversion is in compliance with the applicable laws and regulations.
Procedure for Central Government Sanction:
To obtain the central government's sanction, the following steps are typically followed:
- Filing of Form MGT-14: The company needs to file Form MGT-14 with the Registrar of Companies (ROC) within 30 days of passing the special resolution. This form contains the details of the resolution and other relevant information.
- Application to the Regional Director: Along with the filing of Form MGT-14, an application needs to be made to the Regional Director (RD) in Form RD-1. The application should include the reasons for conversion and the proposed changes in the company's Memorandum of Association (MoA) and Articles of Association (AoA).
- Approval by the Central Government: The RD examines the application and submits a report to the central government. Based on the report and other relevant factors, the central government grants the sanction for the conversion.
Conclusion:
Converting a public company into a private company requires the passing of a special resolution by the members and obtaining the sanction of the central government. This process ensures that the conversion is carried out in accordance with the legal framework and regulatory requirements.
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Converting a public company into a private company requires a specialresolution.a)Passed by the members and with sanction of the central Government.b)Passed by the members and approved by the Registrar of companies.c)Passed by the members and approved by the company Law Tribunal.d)Passed by the members and approved by the auditors.Correct answer is option 'A'. Can you explain this answer?
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