Background

Form INC-27 is filed with the Registrar of Companies (ROC) to effect conversion of companies under the Companies Act, 2013. The form must be filed within 15 days of the triggering event, accompanied by altered e-Memorandum and e-Articles of Association.

Compliance Requirements

1. Private Company to Public Company (Section 14(1)(a) of the Companies Act, 2013)

A private company may convert into a public company by passing a special resolution to alter its articles. Upon alteration removing the restrictions required for private companies, the company ceases to be private from the date of such alteration (proviso to Section 14(1)).

Filing Requirements:

• • Form INC-27 with prescribed fee (Rule 33(1) of the Companies (Incorporation) Rules, 2014)
  • Altered e-Memorandum and e-Articles of Association
  • Filing deadline: 15 days from alteration (Section 14(2))
  • Form MGT 14 to be filed within 30 days from the passing of Special Resolution

2. Public Company to Private Company (Section 14(1)(b) of the Companies Act, 2013)

Requires Central Government approval before the conversion becomes valid (second proviso to Section 14(1)).

Filing Requirements:

• • Form INC-27 mentioning Service Request Number (SRN) of Form RD-1 pertaining to the Regional Director’s order (Rule 33(2))
  • Altered e-Memorandum and e-Articles of Association
  • Filing deadline: 15 days from receipt of Central Government order
  • Form MGT 14 to be filed within 30 days from the passing of Special Resolution

3. Unlimited Liability Company to Limited Liability Company (Rule 37 of the Companies (Incorporation) Rules, 2014)

This conversion requires extensive documentation and procedural compliance.

Procedural Steps:

Step 1: Board Resolution and Special Resolution Pass a special resolution in general meeting authorizing the conversion.

Step 2: Public Notice (within 7 days of special resolution) Per Rule 37(2):

• • Publish notice in Form INC-27A in two newspapers (English and vernacular)
  • Place notice on company website, if any
  • Dispatch notice to all creditors and debenture holders via registered/speed post/courier
  • Allow 21 days for objections to be submitted to ROC and company

Step 3: File Form INC-27 (within 45 days of special resolution) Per Rule 37(3), attach:

a) Notice of general meeting with explanatory statement b) Copy of special resolution c) Newspaper publication copies d) Altered e-Memorandum and e-Articles (director/CS certified) e) Directors’ declaration (minimum 2, including MD if any) that conversion won’t affect pre-existing debts/liabilities except member liability limitation f) Complete creditor and debenture holder list with:

• • Names and addresses
  • Nature and amounts due
  • Director’s declaration of notice dispatch with proof g) Directors’ declaration (minimum 2, including MD if any) confirming creditor list accuracy after full inquiry h) Solvency declaration by minimum 2 directors (including MD if any) certifying company can meet liabilities for one year i) Auditor’s certificate of solvency and going concern status j) NOC from sectoral regulator (if applicable) k) NOC from all secured creditors (if any) l) Directors’ declaration (minimum 2, including MD if any) that no complaints/investigations pending

Ineligibility Criteria (Rule 37(8)): Conversion not permitted if:

• • Negative networth
  • Name strike-off application pending
  • Default in filing annual returns or financial statements
  • Winding-up petition pending
  • Director call arrears outstanding for 6+ months
  • Inquiry/inspection/investigation pending

Registration Process

Per Section 18(2), upon satisfaction that all requirements are met, the Registrar shall:

1. 1. Close the former registration
   2. Issue fresh certificate of incorporation in Form INC-11A (for unlimited to limited conversion per Rule 37(6))

Timeline: ROC decision within 30 days of complete application (Rule 37(9))

Post-Conversion Effects

Legal Continuity (Section 18(3)): Conversion does not affect pre-existing debts, liabilities, obligations, or contracts—these remain enforceable.

Validity (Section 14(3)): Registered alterations are valid as if originally in the articles.

Post-Conversion Restrictions (Rule 37(7)):

• • Name change prohibited for 1 year
  • Dividend distribution prohibited until past debts satisfied (excluding secured debts to banks/financial institutions)

Penalty & Punishment

Section 450 – company and every officer of the company in default or such other person shall be liable to a penalty of Rs. 10,000, and in case of continuing default, with a further penalty of Rs. 1000 for per day of default, subject to a max Rs. 2 lakh in case of a company and Rs. 50000 in case of an officer who is in default or any other person