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CS Executive · Company Law and Practice · Memorandum and Articles of Association and its Alteration

Kaveri Textiles Ltd, a public company, passes a special resolution to alter its articles so that it becomes a private company. Under Section 14, when is this conversion alteration valid?

The alteration is valid only when the Central Government approves it by order, on an application made in the prescribed form and manner. A special resolution alone is insufficient, because Section 14 makes a public-to-private conversion invalid without that approval.

  1. AFrom the date the special resolution is passed
  2. BFrom the date the Registrar is intimated by email
  3. COnly when approved by an order of the Central Government on an application in the prescribed form and mannerCorrect
  4. DOnly when the shareholders ratify it after one year

Explanation

The second proviso to Section 14(1) says an alteration that converts a public company into a private company is not valid unless approved by an order of the Central Government. A special resolution alone is not sufficient. The Tribunal's earlier role was replaced by the Central Government.

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