Wednesday, 20 February 2019

Company Registration in Tirupur

Company Registration in Tirupur

Company Registration in Tirupur

Section 32 of Companies Act, 1956

Conversion of unlimited company into limited company

Clause (a) of sub-section (1) of s. 32 of the 1956 Act gives liberty to a company which has been registered with unlimited liability to get itself registered with limited liability. The whole procedure of registering a new company would have to be followed, for it is not a mere question of change of liability. It must, however, be noted that s. 18(1) of the 2013 Act unlike s. 32(1) of the 1956 Act has a wider import and it includes every class of company including a One Person Company, a concept introduced by the 2013 Act. The 1956 Act, on the other hand, alluded to only two classes of company that is limited and unlimited companies.

Re-registration of company already registered as limited company

It is difficult to understand clause (b) of sub-section (1) of s. 32 of the 1956 Act. Possibly it means that a company already limited by shares may be re-registered, as a company limited by guarantee or vice versa. It might, perhaps also cover cases of companies which are declared entitled to be registered under this Act by Part IX of the Act, namely, companies registered under the earlier Acts, under a different pattern of registration. It may be noted further that as per sub-section (2) of s. 32 of the 1956 Act, registration or re-registration of a company under this section will proceed in the same manner as the first registration, and all the formalities as to procedure, filing etc. will have to be gone through.
As regards making the liability of the directors of a limited company unlimited, see also provisions of s. 323 of the 1956 Act. It may be noted that there was no provision in the 1956 Act to convert a limited company into unlimited. For such conversion consent of all the members of the company was necessary. In the case of such company there needed be no obligation of disclosure of several matters in the same way as in the case of individuals and partnership firms.
In case a company limited by shares is sought to be re-registered as a company limited by guarantee without share capital, it would seem to be hit by s. 100 of the 1956 Act and the procedure for reduction of capital would have to be gone through. The English Companies Act 2006 provides for conversion of a limited company into an unlimited company and vice versa under ss. 102 to 111 of the English Act, 2006. 

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