The Companies Act in India prescribes that a business developed in this country can change its legal form due to a set of factors. Investors who want to open a company in India also have the possibility of shutting down their business and re-register under a new business form. However, changing the company type through the procedure of conversion can only be performed for two business forms – the private company and the public company. The Companies Act stipulates two different procedures applicable in this case and our team of specialists in company formation in India can offer in-depth information on the steps that have to be completed in this case.
Changing a public company into a private company in India
According to the Section 31 of the Companies Act, a public company can change its business form into a private company, regardless if the respective company was incorporated from the beginning as a public limited company or it was converted throughout its lifetime into this legal entity, as per Section 44 of the Act.
In order to register a company in India as a private entity, the public company should meet a set of requirements. For example, the company should not be listed on a stock exchange market. If the company is listed, the company’s representatives may still change the legal entity, but it is necessary to wait a year after the public company was delisted.
The company’s statutory documents – the articles of association, will be modified accordingly, by amending the provisions concerning the new business form and, once the procedure is concluded, the Registrar of Companies in India should receive a copy of the new documents. Our team of agents in company formation in India can provide further advice in this sense.
Changing a private company into an Indian public company
A company registered in India as a private business form may be modified into a public company through two main procedures:
• conversion by default;
• conversion by an act of volition.
The manner in which these procedures can be carried out in India are prescribed by the Sections 43, 43A and 44 of the Companies Act and investors can contact our team of consultants in company registration in India for further assistance on the requirements imposed for each type of conversion.