The Companies Act provides circumstances in which a public company may be converted into a private company. The conversion is subject to statutory conditions and OCR registration.
Examples
The Act addresses conversion where circumstances such as the number of shareholders falling below the required public-company threshold arise, subject to exceptions and applicable law.
Effect
After conversion, the legal rules applicable to private companies apply, while the company’s existing assets and liabilities continue.
Practical point
A regulated or listed public company can have additional securities, regulatory and creditor considerations. Conversion should therefore not be treated as a simple name change.