A public company can convert to a proprietary company by passing a special resolution of the shareholders so long as the conversion between the two company types are allowed under section 162 of the Corporations Act 2001 (Cth). For the two most common types of public company, section 162 states that:
A public company limited by shares may convert to:
- An unlimited public company;
- An unlimited proprietary company;
- A proprietary company limited by shares; or
- A no liability company.
A company limited by guarantee may convert to:
- A public company limited by shares;
- An unlimited public company;
- A proprietary company limited by shares; or
- An unlimited proprietary company.
An unlimited public company may convert to:
- Public company limited by shares
- Proprietary company limited by shares
- Unlimited proprietary company
A public no liability company may convert to:
- Public company limited by shares
- Proprietary company limited by shares
In order to convert to a proprietary company, the requirements for proprietary companies set out in section 113 of the Corporations Act must also be met; one of these being that the company must not have more than 50 shareholders.
In order to complete the conversion a special resolution must be passed; the appropriate Forms and documents must be lodged with ASIC and the relevant fee must be paid. The documents to be lodged are:
- A Form 205 - Notification of resolution;
- A Form 206 Application for change of company type; and
- A copy of the new company constitution.
