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

Shree Ganesh Ltd, a public company, passes a special resolution to alter its articles so as to convert itself into a private company. As per the Companies Act, 2013 text, when is such alteration valid?

The alteration is valid only if the Central Government approves it by an order on an application made in the prescribed form and manner. Passing the special resolution alone does not make a conversion of a public company into a private company valid.

  1. AOnce the special resolution is passed
  2. BOnly if approved by an order of the Central Government on an application in the prescribed form and mannerCorrect
  3. COnly if approved by the Registrar after thirty days
  4. DOnly if all debenture-holders consent in writing

Explanation

The second proviso to Section 14(1) states that an alteration converting a public company into a private company is not valid unless approved by an order of the Central Government on an application made in the prescribed form and manner. The special resolution alone is insufficient.

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