Query on managerial remuneration u/s 197 of CA 2013
This query is : Resolved
06 November 2025
Sir
Section 197 of CA 2013 prima facie not applicable to Pvt Ltd Company.
My query is :
A Pvt ltd Company incorporated in India & wholly owned subsidiary of a Foreign Company(a big Company) does Section 197 applicable to that Pvt Ltd subsidiary Company ?
Regards
Abhijit
Section 197 of CA 2013 prima facie not applicable to Pvt Ltd Company.
My query is :
A Pvt ltd Company incorporated in India & wholly owned subsidiary of a Foreign Company(a big Company) does Section 197 applicable to that Pvt Ltd subsidiary Company ?
Regards
Abhijit
06 November 2025
No. - Being a subsidiary of a foreign company does not change its classification under Indian law. If it remains a private limited company, Section 197 does not apply.
Even if the foreign parent is a listed entity abroad or a large multinational, the Indian subsidiary’s compliance is governed by its own legal status under Indian law.
Even if the foreign parent is a listed entity abroad or a large multinational, the Indian subsidiary’s compliance is governed by its own legal status under Indian law.
07 November 2025
Thanks to Sir Dhirajlal Rambhia for sharing his view.
But Sir need a clarification that section 2(71) of CA 2013 inter alia states that pvt Co subsidiary of a Public Co shall also consider as Public Co..
In that case does a Foreign Company not incorporated under CA 2013 the provision of Sec 2(71) not apply to that Foreign Company irrespective that it may be a public/listed company?
Your kind view is expected.
Regards
Abhijit
But Sir need a clarification that section 2(71) of CA 2013 inter alia states that pvt Co subsidiary of a Public Co shall also consider as Public Co..
In that case does a Foreign Company not incorporated under CA 2013 the provision of Sec 2(71) not apply to that Foreign Company irrespective that it may be a public/listed company?
Your kind view is expected.
Regards
Abhijit
07 November 2025
If a foreign public company sets up a private limited subsidiary in India, then that Indian subsidiary may be deemed a public company under Section 2(71) if the foreign parent qualifies as a public company under Indian standards (e.g., not a private company as per Indian law). This is a nuanced area and often hinges on control, shareholding patterns, and the nature of the foreign parent.
- Section 2(71) defines a “public company” only in the context of companies incorporated under the Companies Act, 2013 (or any previous Indian company law). It does not apply to foreign companies.
- Section 2(71) defines a “public company” only in the context of companies incorporated under the Companies Act, 2013 (or any previous Indian company law). It does not apply to foreign companies.
07 November 2025
My sincere thanks to Sir Dhirajlal Rambhia to clarify my doubt.
Regards
Abhijit
Regards
Abhijit
07 November 2025
You are welcome,
09 November 2025
Good luck...
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