ABC Private Limited Company choose to convert itself into a Public Company. It can do so by altering its Memorandum of Association and Articles of Association and by passing ________________________

All India Bar Examination (AIBE) 17-XVII Previous Year Question Papers with Answers

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13.

ABC Private Limited Company choose to convert itself into a Public Company. It can do so by altering its Memorandum of Association and Articles of Association and by passing ________________________

A: Ordinary Resolution

B: Special Resolution

C: Board Resolution

D: None of these

The answer is: B

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Explanation

The correct option is B: Special Resolution.

A special resolution is a resolution passed by the members of a company with a majority of not less than three-fourths of the votes cast in favour of the resolution. A special resolution is required for altering the memorandum of association and articles of association of a company, as well as for changing its name. A special resolution is also required for converting a private company into a public company, as per Section 14 of the Companies Act, 2013. A board resolution or an ordinary resolution would not suffice for such a significant change in the status and structure of the company. Therefore, ABC Private Limited Company can convert itself into a public company by passing a special resolution and filing the necessary forms with the Registrar of Companies.