39. Re-registration of Public Company as Private Company

(1) A Public Company may be re-registered as a Private Company if:

• (a) a Special Resolution that it should be so re-registered is passed; and
• (b) either:

(i) no application has been made under subsection (2); or

(ii) an application has been made subsection (2) and an order has been made by the Court confirming the Special Resolution; and

• (c) an application for re-registration is delivered to the Registrar that includes, or is accompanied by:

(i) a statement of the Company’s proposed name on re-registration; and

(ii) a copy of the Special Resolution that the Company be re-registered as a Private Company; and

(iii) a copy of the Articles of Association as proposed to be amended; and

(iv) a written legal opinion from the Company’s external legal adviser stating that the proposed amendments of the Articles of Association comply with the requirements of these Regulations and any other applicable AIFC Regulations and AIFC Rules.

(2) The holders of not less in the aggregate than 5% of the nominal value of the Shares, or not fewer than 10 Shareholders, of the Company who did not vote in favour of the Special Resolution may apply to the Court, within 28 days after the day the Resolution is passed, to have the Resolution set aside on the ground that their interests would be unfairly prejudiced if the Resolution were not set aside.

(3) If an application is made to the Court under subsection (2), the Court may:

• (a) dismiss it, if no grounds are found that the rights of Persons making the application are adversely affected; or
• (b) confirm the Special Resolution; or
• (c) impose conditions that need to be met before the Company can be registered as a Private Company; or
• (d) set the Special Resolution aside.

(4) If an application is made to the Court under subsection (2), the Registrar must not re-Register the Public Company as a Private Company, until the application has been finally dealt with by the Court.

(5) If the Registrar is satisfied that the Company meets the requirements under this section to be re-registered as a Private Company, the Registrar must re-register the Company accordingly. If the Registrar re-registers the Company, the Registrar must issue an appropriate certificate of conversion that states the date that the certificate was issued.

(6) On issue of the certificate of conversion, the Company becomes a Private Company and the proposed changes in the Company’s name and Articles of Association, as included in or accompanying its application for re-registration, take effect.

40. Re-registration of Private Company as Public Company

(1) A Private Company may be re-registered as a Public Company if:

1. (a) a Special Resolution that it should be so re-registered is passed; and
2. (b) it has a share capital that meets the share capital requirements under section 43 (Minimum share capital) for a Public Company; and
3. (c) the requirements under subsection (2) and, if applicable, the requirements under subsection (3) are met; and
4. (d) an application for re-registration is delivered to the Registrar that includes or is accompanied by:
5. (i) a statement of the Company’s proposed name on re-registration; and

(ii) a copy of the Special Resolution that the Company be re-registered as a Public Company; and

(iii) a copy of the Articles of Association as proposed to be amended; and

(iv) if subsection (3) applies, a copy of the relevant valuation report required under section 46 (Non-cash consideration for Shares in Public Company); and

1. (v) a written legal opinion from the Company’s external legal adviser stating that the proposed amendments to the Articles of Association comply with the requirements of these Regulations, the Rules and all other applicable AIFC Regulations and AIFC Rules.

(2) Before applying to re-register as a Public Company, the Company must obtain:

1. (a) a balance sheet prepared as at a date (the balance sheet date) not more than 7 months before the day the application is delivered to the Registrar; and
2. (b) an unqualified report by the Company’s auditors that the balance sheet has been prepared in accordance with the accounting principles or standards prescribed by the Rules or otherwise approved by the Registrar; and
3. (c) a Written statement by the Company’s auditors that, in their opinion, the amount of the Company’s net assets at the balance sheet date was not less than the aggregate of the Company’s share capital and its reserves.

(3) If Shares are allotted by the Company in the period between the balance sheet date and the passing of the Special Resolution that the Company be re-registered as a Public Company, and the Shares are Paid-up otherwise than in cash, the Company must (unless the allotment is in connection with a Share exchange) comply with the requirements of section 46 (Non-cash consideration for Shares in Public Company) in respect of the Allotment.

(4) For this section, Shares are allotted by a Company in connection with a Share exchange if:

1. (a) the consideration for the Allotment is the transfer of Shares in another Body Corporate or the cancellation of Shares in another Body Corporate, and the Allotment is open to all holders (or all of a particular class of holders) of Shares in the other Body Corporate; or
2. (b) there is a proposed merger with another Body Corporate under which the Company proposes to acquire all the assets and Liabilities of the other Body Corporate in exchange for the issue of its Shares or other Securities to the shareholders or members of the other Body Corporate.

(5) If the Registrar is satisfied that a Private Company that has applied under this section to be re-registered as a Public Company meets the requirements to be re-registered as a Public Company, the Registrar must re-register the Company accordingly. If the Registrar re-registers the Company, the Registrar must issue an appropriate certificate of conversion that states the date that the certificate was issued.

(6) On issue of the certificate of conversion, the Company becomes a Public Company and the proposed changes in the Company’s name and Articles of Association, as included in or accompanying its application for re-registration, take effect.

(7) In this section: auditor means a Person who is registered by the Registrar as an auditor under these Regulations.