Procedure for conversion of Public Ltd Company to a Pvt Ltd Company
A public company can choose to convert itself into a private company. In such a case, it should pass a special resolution to alter its Articles suitably to incorporate the provisions of a private company. In other words, the Articles
should be modified so as to include provisions relating to:
- Limiting the maximum number of members to 50,
- Restricting the right to transfer shares and
- Prohibiting invitation to the public for subscription of shares or debentures.
Within 3 months of passing the special resolution to alter its articles, the company should seek the permission of the Central Government.
Once the government gives approval, the company must file a copy of the altered articles with the Registrar of Companies. The Registrar shall issue the required certificate of incorporation duly changing its name by adding the word ‘Private’.