Part VI of the Companies Act deals with the alteration of the status of companies.
Section 69 provides that a company can convert itself as follows:
a) From being a private company into being a public company;
b) From being a public company into being a private company;
c) From being a private limited company into being an unlimited company;
d) From being an unlimited private company to a limited company; or
e) From being a public company into being an unlimited private company.
CONVERSION OF PRIVATE COMPANY INTO PUBLIC COMPANY
According to sections 70-74 a private company can convert itself into a public company if the following conditions are met:
1. It passes a special resolution
2. It has a share capital
3. If the following requirements concerning the share capital are complied with:
• The nominal value of the company’s allotted share capital is not less than the authorized minimum;
• Each of the company’s allotted shares is be paid up at least as to 25%
• If any shares have been paid up by an undertaking given by a person that the person or another person should do work or perform services, the undertaking has been performed
4. Requirement as to net assets:
• A balance sheet prepared as at a date not more than seven months before the date on which the application is lodged with the Registrar;
• An unqualified report by the company’s auditor on that balance sheet; and
• A written statement by the company’s auditor that in the auditor’s opinion, the amount of the company’s net assets was not less than the aggregate of its called-up share capital and undistributable reserves.
5. An application for registration has to be prepared
6. The company has not previously been converted into an unlimited company;
7. The company has made such changes to its name and to its articles as are necessary in order for it to become a public company; and
8. If the company is unlimited, that it has also made such changes to its articles as are necessary in order for it to become a company limited by shares.
An application for the registration of the conversion of the company into a public company complies with the Act if it:
a) contains:
• a statement of the company’s new name after conversion; and
• if the company does not have a secretary, a statement of the company’s proposed secretary; and
b) is accompanied by:
• A copy of the special resolution converting the company into a public company, unless a copy has already been lodged with the Registrar;
• A copy of the company’s Articles as proposed to be amended;
• A copy of the balance sheet and related documents; and
• A copy of the valuation report (if any).
Section 76 provides that the registrar will issue a new certificate of incorporation after conversion.
CONVERSION OF A PUBLIC COMPANY INTO A PRIVATE COMPANY
Section 77 provides that a public company can convert itself into a private company if the following conditions are met:
a) A special resolution to that effect is passed;
b) The company has made such changes to its name and to its articles as are necessary in order for it to convert itself into a private company limited by shares or by guarantee
c) An application for registration of the conversion is lodged with the Registrar.
Section 81 provides that if all the requirements are complied with the Registrar shall issue a Certificate of Incorporation stating the company’s unique identifying number and that the company is registered as a private limited company.
Section 78 provides if a special resolution has been passed by a public company to convert it to a private company an application can be made to the court to cancel the resolution. The application can only be made by:
a) The holders of not less than 5% of the company’s issued shares
b) Not less than 5% of its members; or
c) By not less than 50 of the company’s members,
The applicants must not have consented to or voted in favour of the resolution
The application must be made within 28 days.
Conversion of Private Limited Company into Unlimited Company
Section 82 provides that private limited company may convert itself into an unlimited company if:
a) All the members of the company have assented to its conversion;
b) The company has not previously been registered as an unlimited company; and
c) An application for registration of the conversion is lodged with the Registrar.
The company shall make such changes in its name and its Articles:
a) As are necessary in connection with its becoming an unlimited company; and
b) If it is to have a share capital, as are necessary in connection with its becoming an unlimited company having a share capital.
Section 83 provides that the Registrar may not register the conversion of a company as an unlimited company unless the application for registration:
a) Contains a statement of the company’s new name on conversion; and
b) Is accompanied by:
• the prescribed form of assent to the company’s being registered as an unlimited company, authenticated by or on behalf of all the members of the company; and
• a copy of the company’s Articles as proposed to be amended.
Section 84 provides for the issue of a new certificate of incorporation if the company complies with all the requirements.
CONVERSION OF UNLIMITED COMPANY INTO PRIVATE LIMITED COMPANY
Section 85 provides that an unlimited company can convert itself into a private limited company if:
a) A special resolution has been passed stating whether the company will be limited by shares or by guarantee.
b) The company has not previously been registered as a private limited company
c) An application for registration has been lodged with the registrar
d) The company has made such changes to its name and to its articles as are necessary in connection with its becoming a private company limited by shares or a private company limited by guarantee.
Section 86 provides that the Registrar may not register the conversion unless the application:
a) contains a statement of the company’s new name on registration of the conversion; and
b) is accompanied by:
• a copy of the special resolution
• a copy of the statement of guarantee
• a copy of the amended Articles
Section 87 provides that if a company complies with all the requirements the Registrar will issue a new Certificate of Registration.
Section 88 provides that if the company has already allotted share capital, it shall within 14 days after the registration; lodge with the Registrar a Statement of Capital. The statement should contain:
a) The total number of shares of the company;
b) The aggregate nominal value of those shares;
c) For each class of shares:
• the prescribed particulars (if any) of the rights attached to the shares;
• the total number of shares of that class; and
• the aggregate nominal value of shares of that class; and
d) The amount paid up and the amount (if any) unpaid on each share
CONVERSION OF PUBLIC COMPANY INTO UNLIMITED PRIVATE COMPANY WITH SHARE CAPITAL
Section 89 provides that a public company limited by shares may convert itself into an unlimited private company with a share capital if:
a) All the members of the company have assented to its being so converted;
b) The company has not previously been registered as a limited company or as an unlimited company.
c) An application for registration of the conversion is lodged with the Registrar
The company shall make such changes in its name; and in its articles, as are necessary in connection with its becoming an unlimited private company.
Section 90 provides that the Registrar may not register the conversion of a private limited company into an unlimited company unless the application for registration:
a) Contains a statement of the company’s new name on conversion; and
b) Is accompanied by:
• the assent to the company’s conversion, authenticated by the members of the company; and
• a copy of the company’s articles as proposed to be amended.
Section 91 provides that if the company complies with all the requirements the registrar shall issue a new Certificate of Registration.