ACCA Applied Skills · Corporate and Business Law (Global) · Corporations and legal personality
Hanoi Trading Ltd, a private limited company, wants to become a public company to access capital markets. Which course of action is correct under the typical rules for converting a private company to a public company?
The company can re-register as public without liquidation. Members pass a special resolution, the name changes to show public status, and it must satisfy minimum share capital requirements and apply to the registrar. Directors alone cannot change status, and becoming unlimited is not required.
- AIt must be wound up and a new company formed
- BIt may re-register as public after members pass a special resolution, changing its name to show public status and meeting minimum capital requirementsCorrect
- CThe directors alone may change its status by a board minute, with no change of name
- DIt may convert only if it first becomes an unlimited company
Explanation
Re-registration is possible without winding up. It normally requires a members' special resolution, an application to the registrar, a constitution amended to reflect public status, a name change and satisfaction of the minimum capital conditions. A board minute alone is insufficient and unlimited status is not a prerequisite.
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