More to the picture than meets the eye

The reasons behind the privatization of a company vary, but it often occurs when the company becomes heavily undervalued in the public market.

The biggest obstacle in this process is getting the acceptance of a company's shareholders, the majority of which need to accept the offer in order for the transition to be completed. If the deal is accepted by the shareholders, the company's buyer will pay a consenting group of shareholders the purchase price for each share they own.   There is a large benefit to this type of transaction for investors, as the private group usually offers a substantial premium for the shares compared to the current market value.

Buyouts can also come from the company's own management rather than an outside source.
Members of a publicly traded company's board of directors have a legal fiduciary responsibility to act in good faith and in the best interest of the company and its shareholders.
  

Changing a company type
During the life of your company, you may decide to change your company type.
Changing company type is a serious step to take so we recommend you seek legal advice if you are considering making such a change.
What you have to do
1.Pass a special resolution.
2.Lodge Form 205 Notification of resolution and Form 206 Application for change of company type with ASIC.

When the change officially occurs
Under subsection 164(3) of the Corporations Act ASIC is required to publish a notice in the Commonwealth Gazette that states that it intends to alter the details of the company's registration. One month after the notice is published in the Gazette the change to company type takes place.

Calling a meeting of members of a company
The notice of meeting sent to members advising them of the meeting must set out an intention to propose the special resolution and state the special resolution. This is in addition to the other information required to be provided in a notice of a meeting including the place, date and time of the meeting, the general nature of the meeting’s business and information about proxy votes where applicable.

Passing a special resolution when holding a meeting
At least 75% of the votes cast by members entitled to vote on a special resolution must be in favour of the resolution for it to be passed.
CHEERS.