Company Law

Conversion of entities into Co [Ch. XXI, Part I]

1.

Which entities are capable of being registered as a Co (entities capable of converting itself into Co)

[S. 366]

  • any partnership firm,
  • limited liability partnership,
  • cooperative society
  • any other business entity formed under any other law for the time being in force

consisting of 2 or more members

2.

Conversion possible into

  • An unlimited Co
  • A Co limited by shares
  • A Co limited by guarantee

3.

Conditions

A Co registered under Co Act, 1882/ 1913/1956 ➔

cannot register u/s. 366

Co having the liability of its members limited by any Act of Parliament other than Co Act 2013 or by any other law for the time being in force ➔

cannot register u/s. 366 as an unlimited Co/Co limited by guarantee

If a Co to be registered as Co limited by shares ➔

it has a permanent paid-up/nominal share capital of fixed amount divided into shares

If to be registered as a Co ➔

assent of a majority of such of its members as are present in person, or where proxies are allowed, by proxy, at a GM summoned for the purpose

If a Co not having the liability of its members limited by any Act of Parliament or any other law for the time being in force is about to register as a limited Co ➔

assent of majority consisting of not < ¾ of the members present in person, or where proxies are allowed, by proxy, at the meeting

If a Co is about to register as a Co limited by guarantee ➔

assent to be accompanied by a resolution declaring that each member undertakes to contribute to the assets of the Co, in the event of its being wound up while he is a member, or within 1 year after he ceases to be a member, for payment of the debts and liabilities of the Co or of such debts and liabilities as may have been contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount

Entity with < 7 members ➔

Has to register as a pvt Co