Section 18 of CA 2013 : Section 18: Conversion Of Companies Already Registered

Explanation using Example

Imagine a company named 'FreshFoods Private Limited' which operates as a small, privately-owned business. The owners now want to expand their business and invite public investment. To do this, they decide to convert their company into a public company. According to Section 18 of The Companies Act, 2013, FreshFoods Private Limited can alter its memorandum and articles of association to change its company class from private to public.

After making the necessary alterations to their documents, they submit an application to the Registrar of Companies (RoC). The RoC reviews their application and, upon being satisfied that FreshFoods has complied with the relevant provisions for registration, closes its former private limited registration. The RoC then issues a new certificate of incorporation, reflecting FreshFoods as a public limited company.

Despite the conversion, all the contracts FreshFoods had entered into as a private limited company, and any debts or liabilities it had incurred, remain in force just as before. The conversion to a public limited company does not affect these obligations, and FreshFoods must continue to honor them.