Section 14 of Companies Act, 2013, provides for Alteration of Articles of Association (AOA) for Conversion of Public Company into Private Company. It was thought appropriate to convert the public Company into the Private Limited Company to avoid unnecessary formalities and to obtain privileges which are available to the Private Limited Companies under the Companies Act, 2013, which would help the Management to carry out its affairs effectively and economically. The conversion will not have any adverse effect on any Shareholders, Creditors, Secured Loans, or any other related party.
A private company becomes a public company by the operation of law: When not less than 25% of the paid up share capital of a private company is held by one or more public companies, When the private company holds not less than 25% of the paid up share capital of a public company. The Company’s Act 2013 also defines a public limited company as one that has limited liability and offers company shares to the public. Anyone can acquire the stocks of such a company either through stock-market trading or via IPOs (Initial Public Offerings).
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