KRISHNA MURTHY RAO (Finance Manager) (24 Points)
15 January 2010Pl. let me know the Implication and consequenses of a Private limited company acquiring the more than 51% of shares in Public Limited Company.?
Will the Private Limited co. remain as Pvt Ltd ?
CS. Ashish Shah
(Service)
(175 Points)
Replied 03 February 2010
Dear Mr. Rao,
If we see the definition of a Public Limited Company (Section 3(iv)] of the Companies Act, 1956, it says a public company means a company which-
1. is not a private company
2. has a minimum paid-up capital of Rs. 5,00,000/- or such higher paid-up capital, as may be prescribed
3. is a private company which is a subsidiary of a company which is not a private company
Therefore, if a private company is a subsidiary of public company, it will be termed as a deemed public company (Section 43A), however, as the provisions of Section 43A has been omitted, the position is that such private company will be a public company and it has to be converted in to a public company.
However, there is nothing in the Act which says that if a private company is a holding company of a public company, it must be converted to public company.
Hence, a private company is a holding company of a public company, it can remain as a private company and enjoy the privileges available to a private company.
Regrds,
Cs. Ashish Shah
gaurav manral
(delhi)
(31 Points)
Replied 08 January 2012
| Originally posted by : Cs. Ashish Shah | ||
Bt is it mandatory to convert a pvt ltd into public ltd , if pvt ltd is a subsidary of public ltb and what about provisions imposed on subsidary pvt ltd??
Charu Srivastava
(Company Secretary)
(4210 Points)
Replied 08 January 2012
Nicely explained by Mr. Ashish,
The private company status shall remain of private company even on acquistion of more 51% shares in Public Limited Company.
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