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CS Executive · Setting Up of Business, Industrial and Labour Laws · Conversion of Business Entities

Ananya Textiles Private Limited wants to become a public company. Under the Companies Act, 2013, which step is required for this conversion by alteration of its articles?

A private company becomes public by passing a special resolution to alter its articles and filing the alteration with the Registrar within fifteen days. Central Government approval is needed only in the reverse direction, from public to private, so the board alone or an ordinary resolution is insufficient.

  1. AAn ordinary resolution of the board of directors alone
  2. BA special resolution altering the articles, with the alteration filed with the RegistrarCorrect
  3. CAn order of the Central Government approving the conversion
  4. DA resolution passed by all the creditors of the company

Explanation

Section 14 allows a company to alter its articles by a special resolution, including alterations that convert a private company into a public company. The alteration is then filed with the Registrar with a printed copy of the altered articles within fifteen days. Central Government approval is required only for conversion of a public company into a private company, so that option is wrong.

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