deemed public company
sreenu
(Querist) 30 May 2009
This query is : Resolved
a private company incorporated in India, which is a subsidiary of a
foreign public company, can we call as deemed public company in india
A V Vishal
(Expert) 30 May 2009
Dear Sreenu,
(2) Unless the context otherwise requires, the following companies shall not be included within
the scope of any of the expressions defined in clauses (i) to (iv) of sub-section (1), and such companies shall be deemed, for the purposes of this Act, to have been formed and registered outside India:—
(a) a company the registered officer whereof is in Burma, Aden or Pakistan and which immediately before the separation of that country from India was a company as defined in clause (i) of sub-section (1);
(b) a company the registered office whereof is in the State of Jammu and Kashmir and which immediately before the 26th day of January, 1950, was a company as defined in clause (i) aforesaid.
Section 4.Meaning of holding company and subsidiary.— (1) For the purposes of this Act, a company shall, subject to the provisions of sub-section (3), be deemed to be a subsidiary of another if, but only if, —
(a) that other controls the compositions of its Board of directors; or
(b) that other holds more than half in nominal value of its equity share capital; or
(c) the first-mentioned company is a subsidiary of any company which is that other's subsidiary.
Illustration
Company B is a subsidiary of Company A, and Company C is a subsidiary of Company B.Company C is a subsidiary of Company A by virtue of clause (c) above.If Company D is a subsidiary of Company
Commencement Company D will be subsidiary of Company B and consequently also of Company A, by virtue of clause (c) above;
and so on.
(2) For the purposes of sub-section (1), the composition of a company's Board of directors shall
be deemed to be controlled by another company if, but only if, that other company by the exercise of some power exercisable by it at its discretion without the consent or concurrence of any other person, can appoint or remove the holders of all or a
majority of the directorships; but for the purposes of this provision that other company shall be deemed to have power to appoint to a directorship with respect to which any of the following conditions is satisfied, that is to say —
(a) that a person cannot be appointed thereto without the exercise in his favour by that other
company of such power as aforesaid;
(b) that a person's appointment thereto follows necessarily from his appointment as director,
managing agent, secretaries and treasurers, or manager of, or to any other office or employment in, that other company; or
(c) that the directorship is held by that other company itself or by a subsidiary of it.
(3) In determining whether one company is a subsidiary of another—
(a) any shares held or power exercisable by that other company in a fiduciary capacity shall be
treated as not held or exercisable by it;
(b) subject to the provisions of clauses (c) and (d), any shares held or power exercisable —
(i) by any person as a nominee for that other company (except where that other is concerned only
in a fiduciary capacity); or
(ii) by, or by a nominee for, a subsidiary of that other company, not being a subsidiary which is
concerned only in a fiduciary capacity;
shall be treated as held or exercisable by that other company;
(c) any shares held or power exercisable by any person by virtue of the provisions of any
debentures of the first-mentioned company or of a trust deed for securing any issue of such debentures shall be disregarded;
(d) any shares held or power exercisable by, or by a nominee for, that other or its subsidiary [not
being held or exercisable as mentioned in clause (c) ] shall be treated as not held or exercisable by that other, if the ordinary business of that other or its subsidiary, as the case may be, includes the lending of money and the shares are held or the
power is exercisable as aforesaid by way of security only for the purposes of a transaction entered into in the ordinary course of that business.
(4) For the purposes of this Act, a company shall be deemed to be the holding company of another
Manish Singh
(Expert) 11 June 2009
yes it shall be a deemed public company in india and shall be liable o follow the procedures made fr publc companies
