Position of md apt - pvt co became subsidiary of public co

Others 912 views 6 replies

CS Ramanuj Asawa

Company Secretary

141 Points Joined November 2008

Holding Company hereafter A Pvt. Ltd.

Subsidiary Company hereafter B Pvt. Ltd.

Events in chronological order:

1. B Pvt. Ltd. becomes wholly owned subsidiary of A Pvt. Ltd. on 10^th November, 2010.

2. B Pvt. Ltd. appointed Managing Director in its Board Meeting held on 15^th May, 2011 with a Remuneration of Rs. 1.50 Lacs per month and filed Form no. 23 and 32.

3. A Pvt. Ltd. is converted from private limited to Public Limited by passing necessary resolution(s) and after complying with the other provisions the certificate for change of name is issued by RoC on 2^nd July, 2011.

4. Consequent to the change of Status of A Ltd., B Pvt. Ltd becomes public company by operation of Section 3 (iv) of Companies Act, 1956.

In the light of above events my queries are:

Whether B. Pvt. Ltd. Need to change its name and its Articles of Association?

As the provisions of sections 198, 269, 309 become applicable, Whether B Pvt. Ltd. has to re-appoint Managing Director and file Form no. 23, 25C and 32?"

Replies (6)

RG - A Helping Hand

Company Secretary

13877 Points Joined May 2011

Dear Sir,

An absolute No to your first query.

No need to change the status of B Limited as far as minimum paid up capital, minimum director and shareholders and Articles are concerned just bcoz of the reason that it is a subsidiary of a Public company.

An absolute No to your second query too.

Again there is no need to re-appoint Managing Director and file Form no. 23, 25C and 32. Current MD should complete his/her term and after expiry of his/her term re-appoint him u/s 269 read with schedule XIII.

Revert if there is any doubt.

Thanks

Guest

Dear RG, What abt remuneration to be paid to MD of that B Pvt. Ltd. (private company) ? Is remuneration to be paid as per section 198 subject to 5% of net profit of company for present term of md of B Pvt Ltd ? or as per schedule XIII ?

Guest

Hi RG, I await your reply to my query, Hope to hear from you soon! Thanks

RG - A Helping Hand

Company Secretary

13877 Points Joined May 2011

First share what is your take on that…

Thanks

Guest

Richank, In case I would have been sure about the same, I must have definately posted about my opinion. Since I am not sure I trust there is no point flooding forum with useless comments.

Guest

Dear RG,

Still I have one more doubt in this case :

What abt remuneration to be paid to MD of that B Pvt. Ltd. (private company) ? Is remuneration to be paid as per section 198 subject to 5% of net profit of company for present term of md of B Pvt Ltd or in the same manner as per the terms of his appointment ?