Procedure – Disposal of application for conversion of public company into private in case of objection

Procedure for disposal of application under section 14 for conversion of public company into private company in case of objection by RD

MINISTRY OF CORPORATE AFFAIRS

NOTIFICATION

New Delhi, the 25th January, 2021

G.S.R. 44(E).—In exercise of the powers conferred by section 3, sub-section (1) of section 7 and sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Incorporation)Rules, 2014, namely: -1.(1) These rules may be called the Companies (Incorporation)Amendment Rules, 2021.

(2)They shall come into force on the date of their publication in the official Gazette.

2. In the Companies (Incorporation) Rules, 2014, in Rule 41,-

(a) in sub-rule (6),

(i) in clause (c), for the words, brackets and figure “sub-rule (6)” the words, brackets and letter “clause (b)” shall be substituted;

(ii) clause (d) shall be omitted;

(iii) the existing sub-rules (9), (10), (11) shall be renumbered as sub-rules (7), (8) and (9) respectively;

(b) for sub-rule (7) as so renumbered, the following sub-rule shall be substituted with the following rule, namely:-

“(7) (i) Where an objection has been received or Regional Director on examining the application has specific objection under the provisions of the Act, the same shall be recorded in writing and the Regional Director shall hold a hearing or hearings within a period of thirty days as required and direct the company to file an affidavit to record the consensus reached at the hearing, upon executing which, the Regional Director shall pass an order either approving or rejecting the application along with the reasons within thirty days from the date of hearing.

(ii) In case where no consensus is received as referred in clause (i), the Regional Director may approve the conversion, if he is satisfied having regard to all the circumstances of the case, that the conversion would not be against the interests of the company or is not being made with a view to contravene or to avoid complying with the provisions of the Act, with reasons to be recorded in writing:

Provided that the conversion shall not be allowed if any inquiry, inspection or investigation has been initiated against the company or any prosecution is pending against the company under the Act.”.

[F. No. 1/13/2013 CL-V, Vol.III]

K.V.R. MURTY, Jt. Secy.

Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 250(E), dated the 31st March, 2014 and last amended vide number G.S.R.795(E) dated the 24th December, 2020. 

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