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Ease of doing business – conversion of public company into private company should be made easy, less time consuming and less costly

Ease of doing business – conversion of public company into private company should be made easy, less time consuming and less costly - Corporate Laws / Banking / SEBI - By: - CA DEV KUMAR KOTHARI - Dated:- 4-12-2018 Last Replied Date:- 4-12-2018 - Relevant provisions and links: Section 14 of the Companies Act, 2013, Rule 68 of the NCLT Rules, 2016 For example case of RE : MANORAMA INDUSTRIAL AND TECHNICAL SERVICES LIMITED 2018 (11) TMI 1044 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA to show lengthy .....

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mpany being members who were allowed to be in excess of 50 members. Now under Companies Act number of members allowed in case of private companies has been increased to 200 + employees/ ex-employees member. Therefore due to increase in maximum numbers allowed now many public companies are eligible for conversion into private company. B. Changes in requirements: Many public companies are having changed circumstances, and now prefer to be converted into private companies. C. Changes in controlling .....

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consuming procedures, as at present. If a company is eligible for amendment of its memorandum and articles as required for a private company, then prima facie company can be considered eligible for conversion. Therefore, simple procedures for conversion can be adopted. To take care of interest of stake holders, provisions can be made to ensure that stake holders are given notice and to file objections with the management. If management is unable to satisfy objections, then such stake holders can .....

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f public companies who want to be converted into private company. For example in a recently reported case of IN RE : MANORAMA INDUSTRIAL AND TECHNICAL SERVICES LIMITED 2018 (11) TMI 1044 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA We find that the company had to follow long and time consuming procedures. There was no objection from any side of stake holders. In fact there was no likely hood of objections. Therefore, for such companies simple procedure should be allowed. There are many other cases o .....

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10.2018 order pronounced. If we consider the date of EOGM as starting point that is 05.06.2017 and consider date of pronouncement of order by NCLT that is 08.10.2018 we find that it took about 14 months, Still some compliances are pending for ultimate conversion and recording as private company, which is pending till 01.12.18 as seen from the website of MCA. On reading of the judgment we find that the company and its Pr. CS were quite prompt in complying with various requirements, still it has b .....

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