Conversion of a private company into a public company:
If the public sector undertaking is registered as a private limited company, and it is required to be converted into a public limited company, then it is necessary to alter the articles of association so as to:
- delete the provisions limiting the number of members; restricting the right to transfer of shares and prohibiting invitations to subscribe for any shares in, or debenture of, the company as required under clause iii of sub-section(1) of section 3.
- amend the other provisions in the articles of association which are inconsistent with the articles required for a public company; and
- insert new provisions or amend the existing provisions in the articles of association, wherever necessary, to bring them in conformity with the requirements of a public company. These would normally relate to free transferability of shares, issue of new share certificates in place of defaced, lost or destroyed share certificates, unclaimed or unpaid dividends, lien on partly paid-up shares, payment of calls in advance, marketable lots of shares, powers of directors to refuse transfer of shares under certain specified situation, closure of books of members and suspension of registration of transfers, changes in the powers of the president of India etc.
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