1. Subject to the provisions of this Act and the conditions contained in its memorandum, if any, a company may, by a special resolution, alter its articles including alterations having the effect of conversion of—
a. a private company into a public company; or
b. a public company into a private company:
Provided that: where a company being a private company alters its articles in such a manner that they no longer include the restrictions and limitations which are required to be included in the articles of a private company under this Act, the company shall, as from the date of such alteration, cease to be a private company:
Provided further that: any alteration having the effect of conversion of a public company into a private company shall not take effect except with the approval of the Tribunal which shall make such order as it may deem fit.
2. Every alteration of the articles under this section and a copy of the order of the Tribunal approving the alteration as per sub-section (1 ) shall be filed with the Registrar, together with a printed copy of the altered articles, within a period of fifteen days in such manner as may be prescribed, who shall register the same.
3. Any alteration of the articles registered under sub-section (2 ) shall, subject to the provisions of this Act, be valid as if it were originally in the articles.
Legal Commentary & Landmark Judgments: Section 14
Section 14 governs the alteration of a company's articles of association by special resolution, regulating the conversion of private companies into public companies and public companies into private companies.
Any alteration of articles must be bona fide for the benefit of the company as a whole and cannot be utilized as an instrument to expropriate minority shareholders.
Section 14 provides vital agility for corporate restructuring while maintaining regulatory checks against minority oppression. The conversion of public companies into private companies underwent procedural decentralization from the NCLT to the Regional Director to accelerate ease of doing business. Corporate practitioners must verify that any alteration containing restrictive transfer provisions complies with Section 58 and does not breach overarching shareholder agreements.