Mumbai, Sept. 21: Tata Sons - the holding company of the $103-billion Tata group - has become a private limited company, reclaiming a status it had enjoyed prior to 1975.

Shareholders of Tata Sons passed a special resolution seeking to convert the public limited company into a private limited entity, which will effectively stymie the Shapoorji Pallonji family from selling its 18.37 per cent equity stake to any outsider.

The other big resolution passed was to confer voting rights to preference shareholders in the event they are not paid dividends for a period of two years or more.

The holders of the 42.15 million cumulative redeemable preference shareholders will "also have the right to receive all the notices of the general meetings of the company".

Preference shareholders do not usually have voting rights - and this resolution is being seen as an another way to hem in Cyrus Mistry, the former chairman of the Tata group who was forced to step down after a bitter row with patriarch Ratan Tata and the Tata Trusts which together hold around 66 per cent in the holding company.

The shareholders also approved a resolution to have a board of directors with a minimum of five and a maximum of 15 members with at least one woman director on the board.

The articles of association will now allow the board to appoint an alternate director who will stand in for a regular director during his absence from India for a period of more than three months.

The alternate director will vacate office when the director returns to the country.

The Mistry family, which has gone to the court contesting the moves designed to oppress the rights of the minority shareholders, have been vehemently opposed to the changes in the articles of association.

The voting pattern could not be ascertained but the shareholding of the Tata Trusts and eight operating companies, including Tata Motors, Tata Chemicals and Tata Steel, would have ensured that the resolutions were carried very easily. A special resolution requires the consent of 75 per cent of the shareholders present and voting.

Tata Sons was originally formed as a private limited company on November 8, 1917. It became a deemed public company under the provisions of section 43A (1) of the Companies Act, 1956 but its articles of association were not changed to reflect this.

In February 1988, the company was reincorporated as Tata Sons Limited. The change in its name was certified by R.V. Dani, then assistant registrar of companies in Bombay.

In a letter issued before the AGM, Cyrus Investments Private Ltd - a Mistry family affiliate - had said that the "real motive behind convening the proposed AGM is mala fide and for an ulterior purpose" which are not in the interests of Tata Sons.

The letter argued that the need for the name change "is being asserted on the footing that it was always the intention of the founding fathers that Tata Sons should be a company that is closely held by the founders' family (that is, the Tata family)."

The Mistry family claimed that the articles of association of Tata Sons were never changed after it became a deemed public company and it, therefore, "continued to contain features of a private limited company".

The concept of a deemed public company is no longer recognised under the Companies Act 2013 - and that has given the opportunity to convert its status to a private firm.

"Although Tata Sons was a public company, by virtue of having retained the articles of association having features of a private limited company, Tata Sons continued to remain a private limited company all throughout," the letter issued by Cyrus Investments had said.

The Mistry camp had also written to the eight Tata group companies urging them not to vote in favour of the resolutions.