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CMA Final · Corporate and Economic Laws · Company Formation and Conversion

Under the Companies Act, 2013, a company of one class registered under the Act wants to convert itself into a company of another class. Which statement correctly describes how this conversion is carried out?

A registered company converts to another class by altering its memorandum and articles. On application, the Registrar checks compliance with registration provisions, closes the former registration and issues a new certificate of incorporation in the same manner as first registration. No winding up or notification is needed.

  1. ABy altering its memorandum and articles, after which the Registrar closes the former registration and issues a fresh certificate of incorporationCorrect
  2. BBy the Registrar simply endorsing the existing certificate, without any alteration of memorandum or articles
  3. CBy winding up the existing company and incorporating a new company that takes over its assets
  4. DBy the Central Government issuing a notification converting the company without any application

Explanation

Section 18 allows a company of any class registered under the Act to convert to another class by altering its memorandum and articles. The Registrar, on application and on being satisfied that the provisions on registration are complied with, closes the former registration and issues a certificate of incorporation as in first registration. Winding up is not required.

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