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Status of company

Preet Kanwar Singh (Company Secretary) (161 Points)

24 January 2011

A company in which 50.25% of shares are held by one State government while

the rest of the shares are held by private sector companies and by retail

shareholders.... watz de status of such company (public company or else)?????

plz clarify

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9 Replies

CA Sandeep Kumar (Audit Assistant) (804 Points)
Replied 24 January 2011

govt company.. sec 617..

Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 25 January 2011

As more than half in nominal value of its equity share capital is held by a State Govt. it's a subsidiary of the Government company as per Section 4(1)(b)((ii) and consequently a Government company as defined in Section 617.

1 Like

Sudhir Garg (Service) (236 Points)
Replied 25 January 2011

Hii

But Section 617 says about holding of ateast 51% to become government company.

Regards- Sudhir

cs ashwini kumar (Company Secretary in Practice) (173 Points)
Replied 25 January 2011

The Company in which 50.25% of shares are held by one/more State Govt./Central Govt. then the category will be "Indian Non-Government Company" and NOT the "Governemnt Company"

Neha Gupta (PCS) (377 Points)
Replied 25 January 2011

Yes, agreed with Ashwani ji its not a government comapny, it can be either public or private non govt. company

Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 25 January 2011

Though Section 617 talks about 51% holding by a CG or SG, it also says that a subsidiary of a government company shall be a government company.

As per Section 4(1)(b (ii), a company shall be deemed to be a subsidiary of another if the other company holds more than half in nominal value of its equity share capital i.e. more than 50%. In the instant case 50.25% is held by the government company, so the government company is a holding company and the other is a subsidiary of a government company and consequently the subsidiary is also a government company.

This is my interpretation. Let's have the views of other experts in the forum too.

cs ashwini kumar (Company Secretary in Practice) (173 Points)
Replied 25 January 2011

Fully agreed with Ms. Jaishree.'s reply. However, as per query, 50.25% is held by the government (no where mentioned in the query about Govt. Company). This is my interpretation of the query posted by Mr. Preet.