IN RE Vs. SWAJAN VANIJYA LIMITED

JUDGEMENT

(1.) Heard the Ld. Pr. C.A. representing the Petitioner Company.

(2.) The instant petition is filed under sub-section (1) of Section 14 of the Companies Act, 2013 (Act, 2013), seeking approval of this Tribunal to the conversion by altering the Articles of Associations, as sought to be effected by a Special Resolution passed at the Extra-ordinary General Meeting (EOGM) held on 25.10.2016 for the change of status of the Company from "Public Limited Company" to "Private Limited Company".

(3.) The brief facts that emerged from the petition are that the Company was incorporated as an unlisted Public Company limited by shares, on 16.06.2011, under the provisions of the Companies Act, 1956 under the name and style of "Swajan Vanijya Limited". The authorised share capital of the Company is Rs. 5,00,000/- (Rupees Five Lakhs only) divided into 50,000 (Fifty Thousands only) equity shares of Rs. 10/- (Rupees Ten only) each and the issued subscribed and paid up equity share capital of the Company is Rs. 5,00,000/- (Rupees Five Lakhs only) divided into 50,000 (Fifty Thousands only) equity shares of Rs. 10/- (Rupees Ten only) each. The Board of Directors of the Company comprises of 3 (Three) Directors and 7 (Seven) shareholders. The Company has not yet started its business operations. The Board of Directors of the petitioner Company has passed a resolution at the meeting of the Board on 03.10.2016, approving the proposed alteration of the Articles of Association of the Company and decided to call an extraordinary general meeting (EOGM) of the Members of the Company, on 25.10.2016, to obtain consent on this line. After due notice to the members, EOGM has been called and held on 25.10.2016. A Special Resolution has been passed at the said EOGM pursuant to the section 18 read with sections 13 & 14 of the Companies Act, 2013 and other applicable provisions and rules made thereunder, for conversion of the Company into a "Private Limited Company" and the name of the Company be changed from "Swajan Vanijya Limited" to "Swajan Vanijya Private Limited" by addition of the word 'Private' before the word 'Limited'. A new set of Articles of Association, as applicable to the Private Limited Company, has also been approved by the Members and adopted the new set of Articles of Association of the Company. The reason for conversion into Private Limited Company, as mentioned in the petition, is in order to do away with the onerous compliances required from a Public Limited Company and to avail privileges which are available to the Private Limited Companies under the Companies Act, 2013 and it is also felt that it would help the Company to eliminate and streamline its corporate compliances and increase efficiency in its functioning. It is also stated that the company has not yet started its business operations and it is a closely held public company limited by shares with seven shareholders and it does not intend to raise any fund from the public. It is further stated that the Company is a limited Company and the conversion into Private Limited Company shall not affect any debts, liabilities, obligations or contracts incurred or entered into by or on behalf of the Company before conversion and as such debts, liabilities, obligations and contracts may be enforced in the manner as if such conversion had not been done. It is further stated that the related parties of the company will not be affected by the conversion and the interest of none of the member, creditor, or third party will be prejudiced if the conversion is approved. The company is not registered under section 8 of the Companies Act, 2013 and it has neither any creditor nor debenture holder as on 25.01.2017. It has no contingent or unascertained debt or claim payable as on 25.01.2017. The Company has duly filed its Special Resolution with the Registrar of Companies, West Bengal, in e-form MGT-14.