Company formatin query

Pvt ltd 643 views 3 replies

CA Saranya

Practicing Chartered Accountant

329 Points Joined February 2010

Dear all...

I need clarification regarding the following 2 issues..

1. We have a client who is already a private limited company. We are now planning to form a group company (which is going to be public company) under which the existing private company and some 5 more private companies are going to be formed (all in different fields). Suggest me which option is the best from the following to proceed with the same:

a) Convert the existing private limited company into a private group limited company and form new subsidiaries.

b) Form a new Group limited company which ll take over the existing private company and other new companies to be formed as subsidiaries.

Pls help me in this regard and also let me know how long it ll take to form a new public company and conversion of private limited into public...

Thanks for your help.

Replies (3)

praveen

Chartered Accountant

6971 Points Joined September 2007

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Hi,

It would take around a month or so for either options.

But forming a new company would be much easier in my opinion.

The new company can purchase the shares of the other private limited companies and become the holding company of the companies you are speaking.

BRS83

37 Points Joined March 2010

Hi Friends,

I have some what this kind of query - Please sort it out for me

Recently I came across one private ltd. Energy company which was incorporated in MUMBAI - but when I looked into its structure I was bit confused as this company has incorporated 10 different compnies in same name with the state's name in which it was located. eg the XYZ Energy Pvt Ltd in mumbai with

Authorised Capital(in Rs.)	: 910,000,000.00
Paid up capital(in Rs.)	: 292,158,000.00

But it also incorporated one in Rajashtan

XYZ ENERGY (RAJASHTAN) Pvt Ltd with

Authorised Capital(in Rs.)	: 1,00,000.00
Paid up capital(in Rs.)	: 1,00,000.00

One in RAJKOT

XYZ ENERGY (RAJKOT) Pvt Ltd with

Authorised Capital(in Rs.)	: 1,00,000.00
Paid up capital(in Rs.)	: 1,00,000.00

And so on

In same manner the company has created 10 companies in 10 different places with same kind of name with just the states name in it as a change and with the same amount of Authorised cap and paid up with same contact persons name...which we can term as its 10 wholly owned subsidiaries .

BUT MY question is ,

what could be the logic behind this kind of structure - why cant the company just open its office as branch office?

why this company created a new comapny incurring huge expenses in incoroperating 10 different companies - it could have simplly open its branch office or so

Please explain me if some one has views on this -

Regrads