How to change type of company?

Can type of company be changed from non-exempt to exempt Private Limited?

Can type of company be changed from exempt Private Limited to non-exempt?

When can we update the type of company if there is any change?

Can we change the type of company from exempt Private Limited to non-exempt?

Can we change the type of company from non-exempt to exempt Private Limited to?

When sole corporate shareholder is replaced with only individual shareholders, the non-exempt Private Company Limited By Shares will remain the type of “Non-Exempt” throughout that particular Financial Year Ending (FYE).

The type of company is not subject to change to “Exempt” unless it is changed while filing the next Annual Return (AR) with the authority. While filing the AR, if there is no more corporate shareholders and the members are not exceeding 20, then the company can be able to change from non-exempt to “Exempt” type which will be effective only for the following FYE after AR and vice-versa for Exempt to Non-Exempt type also.

Eg:

• 01-Jan-2019: A company was incorporated with sole Corporate Shareholder hence it is a Non-Exempt Private Company Limited By Shares.
• 31-Dec-2019 is set as the first Financial Year Ending (FYE).
• 05-May-2019: The corporate shareholding is transferred to an individual natural person as a sole shareholder.
• So, the company qualifies to be the type of Exempt as there is no more corporate shareholder or more than 20 members.
• However, the company is unable to change the type from Non-Exempt to Exempt until the FYE while filing the Annual Return (AR).
• When filing AR for FYE Dec-2019, the company is given the option to update the type of company from non-exempt to Exempt.
• Only after that the company will be Exempt throughout the next FYE.
• Conclusion: The type of company can be updated only while filing the AR according to the eligibility.