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Can a Private Company be the holding company ?

Prejith (Pursuing CA) (92 Points)

06 May 2010

Dear Sir/ Madam,

The doubts placed below are some of the practical issues that I came across... Please clarify..

A) Can a Private Company be the holding company of a Public Company ?

B) If yes to the above answer, is it possible for a Public Company to have two share holders (actual requirement being 7)... i.e. one private company which holds more than half of the nominal value of the share capital and the another company holding the remaining half...??

Kindly Clarify

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7 Replies

vikash rathi (Chartered Accountant) (787 Points)
Replied 06 May 2010

answer to the first question : yes a pvt ltd company can be holding company of public company by holding its majority of shares......no doubt no restriction in law any where

2nd answer: no in no case a public company be formed with 2 member it need 7 member minimum individual or company any one (sec 3 (1) (2) )

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 07 May 2010

(a) Any private company can be the Holding as well as subsidiary of any Public or private company.

(b) No, it is not possible. In case of public company there must be 7 shareholders.

If you want to create such private company, holding of a public company even in that case seven shareholders are required.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 07 May 2010

Originally posted by : vikash rathi
	answer to the first question : yes a pvt ltd company can be holding company of public company by holding its majority of shares......no doubt no restriction in law any where 2nd answer: no in no case a public company be formed with 2 member it need 7 member minimum individual or company any one (sec 3 (1) (2) )

Totally Agree

RITU BAJAJ (COMPANY SECRETARY) (158 Points)
Replied 07 May 2010

Our learned members are absolutely right.

Nitin Singhal (Gaining knowledge...) (320 Points)
Replied 07 May 2010

First of all, YES a private company can be holding company of a public company.

As we know that public company is required to have at least 7 members. therefore that public company is also no exception. however in these cases almost all the share capital is held by Private company except 6 shares which are beneficially allotted in favour of its directors' relatives or any other key person.

ravi choudhary (employee) (41 Points)
Replied 23 August 2013

CAN ANY OF U GIVE ME AN INSTANCES WERE A PUBLIC COMPANY IS A HOLDING COMPANY OF PRIVATE COMPANY...

PLZ.............

sathish kumar (manager) (41 Points)
Replied 28 March 2014

Can any one pls inform compliances and issues, if pvt ltd co. is holding of Pubcli Ltd co. by holding morethan 75 % of preference share capital. in line with new co. act 2013. particuarly both are group companies.