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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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y be converted into private company. To be a private company, the company need to have specified conditions applicable to private company. If such conditions are complied with, then only company can be converted into a private company. Some practical situations requiring conversion from public to private company: A. Number of maximum members in private companies: In case of private companies earlier maximum fifty member were allowed subject to additional numbers for employee or ex-employee of co .....

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pattern: In many case due to developments in families, relatives and associates who controlled a public company, now it becomes desirable to convert such company into a private company. D. Ease of doing business: E. In case of private company there is ease of doing business as it is easier to administer and manage private company and make compliance. In case of public companies there ae much more requirement. F. Unlisted companies - many companies have been delisted buy stock exchanges for many .....

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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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orities for check and balance and company management can be relied upon for most of matters of compliance which can be checked and reported by CA and CS. Therefore, team of management of company, CA and Cs in practice and Officers of MCA (mainly concerned Registrar and his team) can constitute reasonable team and workforce as well as surveillances for the purpose of conversion. Considering size of company, members, and creditors, simplified procedures can be applied for two or three categories o .....

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f similar nature. It can be said that once a company is eligible for conversion, as found by management and if approved by shareholders, debenture holders and creditors, there should not be much restrictions and procedure for converting a public company into a private company. The article is written with an open mind on making business easy and without going into technicalities and procedures because such formalities and procedures are known to readers on this website and can be searched and fou .....

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