Companies (incorporation) rules, 2014 amended wrt conversion of public to private company
January 27, 2021
The MCA has amended the Companies (Incorporation) Rules, 2014 related to the procedure for disposal of applications for conversion of public company into private company under Rule 41. Specifically, it has removed the provisions of deemed approval of the application by the Regional Director (RD) in two cases:
where further information called for by the RD has not been provided or the defects or incompleteness has not been rectified within thirty days, and, the RD has not rejected the application within thirty days from the date of filing application or within thirty days from the date of last re-submission made. as the case may be; and
in cases where an objection has been received or the RD, on examining the application, has specific objections and fails to hold a hearing within a period thirty day and direct the company to record the consensus by affidavit and pass an order, either approving or rejecting the application within thirty days from the date of hearing.
Where no consensus is received as required in (ii) above, the RD may approve the conversion, if he is satisfied having regard to all the circumstances of the case, that the conversion would not be against the interests of the company or is not being made with a view to contravene or to avoid complying with the provisions of the Act, with reasons to be recorded in writing: Provided that the conversion shall not be allowed if any inquiry, inspection or investigation has been initiated against the company or any prosecution is pending against the company under the Act.
To refer to the gazette notification dated 25 January 2021 of the Companies (Incorporation) (Amendment) Rules, 2021, click here.
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