Public company becoming private and unlimited
Section 109: Re-registration of public company as private and unlimited
232.This section is a new provision, which, as recommended by the CLR (Final Report, paragraph 11.11), enables a public company to re-register as a private unlimited company with a share capital without first having to re-register as a private limited company. The conditions specified in subsection (2) must be met and all of the members must give their assent to the company being so re-registered. In the case of a deceased member, assent may be given by the personal representative of the deceased member’s estate. Where a member is bankrupt, assent may be given by his trustee in bankruptcy (to the exclusion of the member in question).
233.A public company may not re-register as an unlimited private company under this section if it has previously been re-registered as limited or as unlimited (see subsection (2)). The intention behind this subsection (which is based on the provision in subsection (2)(e) of section 90) is that a company should not be able to enjoy the benefits of limited liability or avoid the obligations that are attached to this, for example, the increased reporting requirements, by continually swapping from limited to unlimited status.
Section 110: Application and accompanying documents
234.This section is a new provision. It prescribes the contents of the application for re-registration where a company is proposing to re-register from public to unlimited private and the documents/information that must accompany this application. There is a requirement for a statement of compliance (see note on section 13) and, in contrast to the statements of compliance that are required elsewhere in the Act, the statement of compliance that is required here must contain a statement made by the directors confirming that:
the persons by whom or on whose behalf the form of assent is authenticated constitute the whole membership of the company; and
if any of the members have not authenticated that form themselves, that the directors have taken all reasonable steps to satisfy themselves that each person who authenticated it on behalf of a member was lawfully empowered to do so.
235.This mirrors the requirements of the directors’ statement in section 103(4).
Section 111: Issue of certificate of incorporation on re-registration
236.This section is a new provision which requires the registrar to issue a new certificate of incorporation is she is satisfied that a public company is entitled to register as private and unlimited. On the issue of a new certificate of incorporation (which must state that it is being issued on the re-registration of the company), the company becomes a private unlimited company and the change to its name and any amendments that were made to the articles take effect.
237.The certificate of incorporation on re-registration is conclusive evidence that the company is now a private unlimited company and that the requirements of the Act as regards re-registration have been met.