Company Law 274(1)(g)

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Priyanka

Priyanka (Querist)

30 November 2010 is 274(1)(g) applicable on private companies ?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

30 November 2010 Sub rule 3 of rule 1 of Companies (Disqualification of Directors u/s 274(1)(g) of the Companies Act,1956),Rules,2003 says as follows:-
"These rules shall apply to all public limited companies registered under the Companies Act,1956".

CA Sanat Pyne

CA Sanat Pyne (Expert)

30 November 2010 Though 274(1) uses the generic word “Company”, 274(1)(g) [which was inserted by Amendment to the Act in 2000] uses specifically the words “Public Company”. It implies that all the provisions of Section 274 except for 274(1)(g) are applicable to all –
(a) Public
(b) Private
(c) Private which is a subsidiary of public

And 274(1)(g) is applicable to only to Public Companies.

To arrive at the conclusion that 274(1)(g) is not applicable to Private Company which is a Subsidiary of a Public company we need to prove that

(1) It is not applicable to Private Companies. Because if a provision is applicable to a Private Company it is also applicable to Private Company which is a subsidiary of Public Company.
(2) It is applicable only to Public Companies and not the Private Company which is a subsidiary of Public Company