Procedural requirements in case of single shareholder

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swarupa (Querist)

26 June 2010 Two questions>

1. Can the holding company be the only sharholder in ints subsidiary..if yes it contradicts the criteria of minimum sharholding.

2. WHat is the procedure if at any point a private company has only one shareholder left

Aditya Maheshwari

Aditya Maheshwari (Expert)

26 June 2010 1. The holding company does not all shares only in its name only. one share is issued jointly with the name of the director of the company.

For eg. in case holding company is X Pvt. Ltd. of Y Pvt. Ltd. having 10,000 share of Rs. 10/- each then X. Pvt. Ltd. will be holding 9,999 shares in its own name and 1 share will be held by it jointly with a director or any other person who will be the nominee of the company.

So there will be two shareholders in the company and it will not be violation of any rules though entire 10,000 share may have been purchased by X Pvt. Ltd. only.

2. If your second query is in conjunction with the first then both queries have been resolved.

swarupa

swarupa (Querist)

26 June 2010 Thanks Aditya,

Let me illustrate my doubt.

Company A holds share in company B along with individuals X & Y.

X & Y transfer their shares to Company A.

How should this be addressed?

Is there a period of six months through which Company A can hold one share jointly with the director of company B??

Aditya Maheshwari

Aditya Maheshwari (Expert)

26 June 2010 There is no limitation of period as all the wholly owned subsidiaries are held in this way only. Otherwise there is no other way to make companies wholly owned if the entire shares are not held by one company.

However there is a requirement of minimum shareholders by companies act and hence the other shareholder is also there jointly with the company.

It is considered as entire shares are held by A Pvt. Ltd. the holding company and its nominees.

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