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Pooja (Querist)
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30 January 2013 I need an expert advice in this matter. actually one of our client company is failed to file its annual returns from the F.Y. 2008-09 till date, so that the director is being defaulted in MCA site.

In F.Y. 2007-08 Paid up capital was 500,000/-

there was in the financial year 2008-09:
By adding the info:

1. X Ltd purchased it 25% shares
2. Y (P) Ltd purchased its 25% shares
3. Z (P) Ltd purchased its 25% shares

What is the company status in this particular year?
Will there any deemed public co. status?
Will any holding subsidiary relation?

Thanking you in advance.

Best Regards

CS Suraj Arora

CS Suraj Arora (Expert)
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30 January 2013 Dear Pooja

The Company is Private Limited Company. And for your attention there is no concept of deemed Public Company in the Companies Act 1956.

Thanking you
Suraj Arora

Pooja

Pooja (Querist)
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01 February 2013 Thanks for the information sir. but can u please elaborate your answer.. if there is no concept of deemed pub. co. Then what exactly the meaning of deemed public company??

Please reply sir.. its urgent...

Thanks in advance.

Best Regards

Pooja

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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02 August 2025 Hi Pooja,

Glad to help clarify this!

### 1. **Is there a concept of "Deemed Public Company" under Companies Act, 1956?**

Strictly speaking, **the term "Deemed Public Company" is NOT explicitly defined in the Companies Act, 1956** as a separate category. The Act only recognizes:

* Private Companies
* Public Companies

However, **Section 43A of the Companies Act, 1956**, which dealt with "Deemed Public Companies," was introduced to deal with certain private companies that had holding or subsidiary relationships with public companies or certain other conditions. So **some private companies can be treated as "Deemed Public Companies" for specific legal purposes.**

### 2. **When is a Private Company considered a "Deemed Public Company"?**

According to **Section 43A of the Companies Act, 1956**, a private company shall be deemed to be a public company if:

* It is a subsidiary of a public company, or
* A public company has control over the composition of its Board of Directors, or
* A public company holds at least 25% of its paid-up share capital.

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### 3. **In your case:**

* If X Ltd (public company) purchased 25% shares,
* Y (P) Ltd and Z (P) Ltd purchased 25% each,

You need to check:

* Are X Ltd, Y (P) Ltd, or Z (P) Ltd public companies?
* Does any one of these companies **control the composition of the Board** of the private company?
* Does any one of these public companies hold at least 25% of the paid-up capital individually or jointly?

If yes, **then your client company may be treated as a "Deemed Public Company" under Section 43A.**

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### 4. **Effect of being a "Deemed Public Company":**

* The company loses the privileges of a private company.
* Compliance requirements become similar to those of a public company.
* For example, restrictions on transfer of shares and invitation of public deposits may apply differently.

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### 5. **Holding-Subsidiary relationship:**

* If X Ltd holds 25% shares and controls the Board or majority shareholding, it may be a holding company.
* Y (P) Ltd and Z (P) Ltd with 25% shares each could also have similar influence depending on voting rights.

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### Summary for your query:

* The company is **still a Private Limited Company legally**, but it **may be treated as a deemed public company under Section 43A** due to shareholding structure.
* You need to analyze shareholding and control to determine holding-subsidiary status.
* If a public company holds 25% or more, or controls the Board, **the deemed public company status applies.**

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If you want, I can help draft a detailed legal note or check MCA records for exact shareholding and board control info. Let me know!

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Does this help clear your doubts?

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