On December 18 last year, the National Company Law Appellate Tribunal (NCLAT) termed the practice of converting Tata Sons from a public limited to a private limited company as 'illegal'. Following this NCLAT order, the Registrar of Companies (RoC) filed a petition requesting NCLAT to change the order.

This petition was rejected by the NCLAT. After this, Tata Sons approached the Supreme Court. The Supreme Court has now stayed the NCLAT's decision to dismiss the petition. Along with this, the Supreme Court has sought answers from the government and the concerned ministry.

Actually, the NCLAT had said in its order that the decision to convert Tata Sons from public to private company is 'illegal'. Simultaneously, the NCLAT had directed the reinstatement of the sacked chairman of Tata Sons, Cyrus Mistry. The Registrar of Companies objected to this decision and filed a petition.

According to the petition, necessary amendments should be made in the order dated December 18, so that RoC's work does not appear illegal. RoC contends that it took this step under the rules along with the provisions of company law. Apart from this, RoC has also asked NCLAT to drop the allegation saying that RoC Mumbai helped Tata Sons in a hurry.

Approval was received in September 2017

Tata Sons got itself a Public Limited in September 2017. Company to Private Limited It was approved by the shareholders to convert into the company. With this, the company did not need the approval of shareholders for important decisions. Such decisions could only be taken with the approval of the Board of Directors. Let us tell you that Tata Sons is the holding company of the Tata group. Currently, Tata Trusts hold 66 percent stake in Tata Sons.

Mistry opposed the proposal

Earlier, when there was a proposal to make Tata Sons a public-to-private company, the then chairman Cyrus Mistry had opposed it. Please tell here that Cyrus Mistry was removed as the chairman of Tata Sons in October 2016 due to differences. The proposal was approved only a few months after Mistry's dismissal.

Difference between Private and Public

There are many differences between private and public companies. There are neither regulatory restrictions on private like public company, nor they have to make disclosure of every decision public. At the same time, it is necessary to call a public company general meeting. Also, there is no need to appoint private company as independent director.