1. A company of any class registered under this Act may convert itself as a company of other class under this Act by alteration of memorandum and articles of the company in accordance with the provisions of this Chapter.
2. Where the conversion is required to be done under this section, the Registrar shall on an application made by the company, after satisfying himself that the provisions of this Chapter applicable for registration of companies have been complied with, close the former registration of the company and after registering the documents referred to in sub-section (1 ), issue a certificate of incorporation in the same manner as its first registration.
3. The registration of a company under this section shall not affect any debts, liabilities, obligations or contracts incurred or entered into, by or on behalf of the company before conversion and such debts, liabilities, obligations and contracts may be enforced in the manner as if such registration had not been done.
Legal Commentary & Landmark Judgments: Section 18
Section 18 regulates the conversion of companies already registered into another class or status, providing that conversion does not affect existing debts, liabilities, or ongoing legal proceedings.
In M&A and corporate conversions, contracts need not be novated because Section 18(3) preserves liabilities by operation of law. However, parties must file a certified copy of the fresh Certificate of Incorporation in pending civil and NCLT proceedings to update the cause title.