Under the Companies Act, 2017, a private company can be converted into a single-member company by following the procedures outlined in Section 47 of the Act. The key steps involved are as follows:
- Special Resolution and Approval: The private company must pass a special resolution to amend its memorandum and articles of association to include provisions relating to a single-member company. This resolution must be approved by the Securities and Exchange Commission of Pakistan (SECP) in writing.
- Application for Conversion: Upon passing the special resolution, the company must apply to the SECP for the change in status. The SECP, upon being satisfied that the company is entitled to such conversion, will allow the conversion through a written order.
- Filing with Registrar: A copy of the order confirming the conversion, duly certified by an authorized officer of the SECP, must be forwarded to the company and to the registrar within seven days from the date of the order. Additionally, the amended memorandum and articles of association must be filed with the registrar within fifteen days from the date of the order.
- Registration: The registrar will register the amended memorandum and articles of association. Thenceforth, these documents will constitute the memorandum and articles of the newly converted single-member company.
- Compliance and Penalties: If the company fails to comply with these provisions, it and every officer of the company in default will be liable to a penalty not exceeding level 2 on the standard scale.
Thus, the process of converting a private company into a single-member company requires careful adherence to the procedural requirements set forth in 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 [email protected]