Section 4(7) of companies act, 1956

dear Mr. Grover,

your query is not quite clear. still as per the standing, if A is an indian incorporated company and it holds a single share in the joint venture, then (if the foreign holding co of x is a public co) the JV shall be treated as a public co.

dear Mr Singh

The issue is we have to incorporate a JV company , X Pvt Ltd's share 74% and sare of local company will be 26%

X ltd is pvt company u/s 4 (7)

new JV company wud be incorporated as private company

acc to section 4(1) subsidiary of subsidiary is also subsidiary of main holding company

4(7) says subsidiary of froeign private company having less that 100% shareholding is public company evn if incorporated as private company (deemed public)

3(1)(iv)(c) says subsidiary of pvt company is pvt company

x pvt limited is purely private company as per section 4(7)

anything more u wanna ask for answering ?

Dear Mr. Grover,

but as you told earlier that A, an Indian co holds a single share in the X co, that means X can not be called a pvt co if its holding co which is a foreign co, is a public co.

so if this is the situation, the JV shall be a deemed public co. 

Dear Mr. Grover,

but as you told earlier that A, an Indian co holds a single share in the X co, that means X can not be called a pvt co if its holding co, which is a foreign co, is a public co.

so if this is the situation, the JV shall be a deemed public co. 

Sec 3(1)(iv)(c) says that a private company shall be regarded as a public company if it is subsidiary of a company WHICH IS NOT A PRIVATE COMPANY. Your existing private ltd co is stated to be the subsidiary of a foreign company. Since that foreign company is not a private company  as per the Act, your existing co shall be a public co.

siva208@yahoo.com

Sir

One share is held by Foreign National in the capacity as nominee of the Holding coompany and thus, the X Pvt Ltd shall be held as private company.

Thanks

Himanshu

Sir

Sorry to say but read Section 4

Section 4(1) says subsidiary of subsidiary is also subsidiary of Holsing company

Section 4(7) says if foreign holding of India private company holds 100% shares (except one share held by foreign nominee of holding company) evn after that the foreign company is public company, the indian wholly owned subsidiary shall be having the status of PURELY PRIVATE COMPANY.

Thanks

Himanshu

firstly, you did not disclose that A is a foreign national and I assumed that A is an Indian co.

Again the words used under the said sec is "entire share capital" which means nt even a single share shuld be out side the scope of the section. 

but here in your query a single share share is held by an individual and not a body corporate which shall make the indian subsidiary a deemed public co if the foreign co (holding co) may be treated as a public co.

Manish Ji

One share is held by Foreign National and he is holding that in the capacity of the NOMINEE OF THE HOLDING COMPANY so the company is deemed to be the PRIVATE LIMITED COMPANY ad the share is given to that Foreign National as Min 2 number of members is required to form a company as per section 12(1) of the Companies Act, 1956

Thanks

Himanshu

if the holding co (foreign co) comes under the definition of public co under the companies act, then since one share has been held by an individual and not a body corporate, the indian subsidiary shall be termed as a deemed public co. please refer some good book on companies act and go through the interpretation of the said section. that will clear your doubts.

Okay Sir

What if one share of X Pvt ltd is held by another foreign company as the nominee of Holding company(Foreign Company) ?

Than what will be the status of the Joint Venture of X Pvt Ltd with local company having ration of 74% of x pvy ltd and 26% of local company ?

Please reply.

as per the new version, since X has been incorporated in India and the foreign co satisfies the definition and provsions of the said section, X shall be treated as a pvt co. again  since the, JV shall be a subsidiary X so the same shall be treated as  a pvt co.

Sir

X pvt Ltd is private company.

But as per discussion with other professionals, Proposed JV Company would be a deemed public company as Jv would be subsidiary of subsidiary of Foreign Company (Holding) and being subsidiary of holding company with capitalization of less than 100% (actual = 0% as 74% will be by the X LPvt Ltd)

Section 4(1)(c) 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 the first-mentioned company is a subsidiary of any company which is that other’s subsidiary.

Section 4(7) A private company, being a subsidiary of a body corporate incorporated outside India, which, if incorporated in India, would be a public company within the meaning of this Act, shall be deemed for the purposes of this Act to be a subsidiary of a public company if the entire share capital in that private company is not held by that body corporate whether alone or together with one or more other bodies corporate incorporated outside India.

3(1)(iv)(c) “public company” is a private company which is a subsidiary of a company which is not a private company.]

Kindly guide.

I'll be waiting for the reply Sir as people are unable to answer this as 2 sections are contradicting each other