Section 149(2a)

In my opinion, Section 149(2A) is not applicable to a private limited company, even if it is a subsidiary of a public company. Other views welcome.

Dear kavita,

A private company, which is a subsidiary of a public company, is placed on the same footing as that of a public company for the purposes of the provisions of the Companies Act. So, “a private company which is subsidiary of a public company is also a public company”.

But even when such a status of a public company is bestowed on a private subsidiary, even then the basic structure of such a subsidiary remains the same, hence it is neither required to increase the number of members to seven from two, as in case of private company; nor it is required to alter conditions included in articles of association so as to meet requirements under Section 3 (1)(iii).

In the case of Hillcrest Realty Sdn. Bhd. v Hotel Queen Road Pvt. Ltd. and Ors.[2], it was opined that the basic characteristics of a private company in terms of Section 3(iii) of the Act do not get altered just because it is a subsidiary of a public company in view of the fiction in terms of Section 3(3)(iv)(c) of the Act that it is a public company.

Thus, Section 149 (2A) will not apply to a private company which is a subsidiary of a public company.

Regards,

Veeral Gandhi

No need to make basic changes, Its just those sections shall become applicable where it is specifically mentioned so.a

According to me the aforesaid section shall be apply to Private Company who is subsidiary of the Public just because this section excludes private company not Private Company who is subsidiary of the Public Company.

Correct me if i am wrong.

Charuji, I agree with Veeralji. The basic characteristics of a private company in terms of Section 3(iii) of the Act do not get altered just because it is a subsidiary of a public company. After all, it is still a private company and thus, it is not purely a Public company. So, Sec 149(2A) would not apply to this company. 

Section 149(2A) is not applicable to Private company which is subsidiary of public company. The provisions of section 149 are not applicable to private company which is incorporated as such. 

Thanks for correcting me...

149 (2A) not applicble on private co which are subsidiary of public co.

DEAR EXPERTS,

                         PRVATE COMPANY WHICH ARE SUBSIDIARY OF PUBLIC COMPANY ARE AS GOOD AS PRIVATE COMPANY AND HENCE SHOULD NOT BE CONSIDERED A PUBLIC COMPANY. THEIR BASIC STRUCTURE OR CONSTITUTION REMAINS THE SAME AND HENCE THEY SHOULD NOT BE CONSIDERED FOR THE PURPOSE OF SEC.149(2).

REGARDS,

TANVEER MD MASOOD

CALCUTTA.