A company limited by shares may be converted into a company limited by guarantee if:

1. The liability on any of its shares is fully paid.
2. All the members agree in writing to the conversion and to the voluntary surrender to the company for cancellation of the shares held by them immediately before the conversion.
3. A new constitution, appropriate to a company limited by guarantee, is adopted by the company pursuant to section 30 of the Companies Act, 2019 (Act 992).
4. A member agrees or the members agree in writing to contribute to the assets of the company, in the event of the company being wound up, to an amount of money not less than that prescribed by subsection (3) of section 8.

On delivery to the Registrar for registration of a statutory declaration by a director and the Company Secretary confirming that the conditions of subsection (1) have been complied with, the Registrar shall issue a new certificate of incorporation to the effect that the company is limited by guarantee.

From the date stated in the certificate:

• The company is converted into a company limited by guarantee,
• The shares in the company shall be validly surrendered and canceled despite the provisions of section 58, and
• The members of the company who have not agreed to contribute to the assets of the company in the event of the company being wound up cease to be members of the company.

The conversion of a company pursuant to this section shall not:

• Affect the rights or obligations of the company except as mentioned in this section, or
• Render defective any legal proceedings by or against the company. (5 marks)