A private company having two or more members can convert its status into single-member company by passing a special resolution for a change of its status, making necessary alterations in its articles, and obtaining the approval of the Commission.
The process of converting a private company into a single-member company involves certain steps and legal requirements. The Companies Act, 2017 governs the formation, operation, and conversion of companies in Pakistan. Here are the key points to consider:
- Consent of the shareholders: The conversion requires the consent of all the existing shareholders of the private company. The shareholders must pass a special resolution to approve the conversion and authorize the necessary actions.
- Alteration of the Articles of Association: The Articles of Association of the private company need to be amended to reflect the change in the company’s structure and the conversion into a single member company. The amended Articles of Association should clearly state that the company is a single member company.
- Change of membership: Following the conversion, the company will have only one member/shareholder. The existing shares held by other shareholders will be transferred or consolidated into the ownership of the remaining member.
- Compliance with legal requirements: The company must comply with the legal requirements for conversion. This may include filing necessary forms and documents with the Securities and Exchange Commission of Pakistan (SECP) or other relevant regulatory authorities, paying requisite fees, and updating the company’s records and registers.
It is important to note that the process and specific requirements for converting a private company into a single member company may vary depending on the circumstances and the specific provisions of the Companies Act, 2017. It is advisable to consult with legal professionals or experts in company law in Pakistan to ensure compliance with all legal requirements and to understand the process in detail.You can send us an email at aemen@joshandmak.com
