Incorporation of Pvt. Company

But Sir

Here ROC is objecting. According to ROC, that proposed pvt. company should be either a public limited company (Because it is proposed to be the subsidiary of public limited Company) or independent pvt ltd. company.

ROC is not getting convinced.

Can u refer me any private limited company which has recently been incorporated as subsdidiary of public limited company?

I would like to share my experience with you..

In our organisation, (which is a public limited Co.), we acquired around 23 private limited companies.

Since these were direct subsidiaries of public co., all the provisions applicable to public co. are applicable on them.

Hence we converted them all into public limited companies.

Even I m very negative on the thought that ROC will allow this.

Just for ref read Section 43A (which is now abolished)

The logic, I guess is: " Subsidiary of a public limited co. is public"

Hence, when the signatories to MoA is a public co., the co. cant be private...

I may be wrong in logic...but I am sure ROC will not allow it..otherwise we would have been the first people to get it done... :)

Dear Pooja

with due respect, I am unable to appreciate the rationale for converting a private company which is a subsidiary of a public to mean that the private company is to be converted into a public for all purposes of the Companies Act, 1956 ("Act"). In this connection, a parallel analogy may be drawn for companies which are incorporated pursuant to Section 4(7) of the Act wherein a foreign company can incorporate a 99.99% private company with the balance 0.001% being retained by an indian individual by filing a declaration under Section 187C of the Act.

It may be noted that some of the provisions of the Act which apply to a public company apply only to a limited extent to a private company being its subsidiary. Thats why the Act, in several places, provides that "the provisions of the Act will not apply to a private company unless it is a subsidiary of a public company." This means that a private company (being a subsidiary of a public company) can continue to retain its characterisitics of a private company and need not be converted into a public company for all purposes of the Act. 

Pl correct me if I am wrong...as a student...I always value your views...

Kindly refer to Hillcrest REalty Sdn Bhd v/s Hotel Queen Road P Ltd (2006) 133 CC 742 (CLB) which dealt with this aspect.

Thank you, Mr. Vijay, for sharing the valuable knowledge.

The case cited by you makes the point clearer.

But, as already inferred by me...it is not obligatory for the subsidiary of the public to get converted into a public co....

But while incorporating the same, ROC will have objections to it...

As a learned person, may I request you to provide more information on the subject..

Thanks in anticipation..

Could you please clarify what aspects of company law in light of our above discussion do you need clarification? Im sorry am unable to appreciate your concern>>>

I hope, the question is clear now

Dear friends,

I am attaching copy of CLB decision in Hilcrest Realty case wherein it has been held that a private co. which is subsidiary of public co. can retain basic characteristics of a private co. as mentioned in Sec.3(1)(iii) in its Articles.

Regards,

Hi

The final course of action we adopted is to form independent pvt .td. company.

ROC is not ready at any cost to incorporate a pvt. ltd co. as subsidiary of public limited company.

Regards

Hinna Garg

Subsidiary category would be come after incorporation only (If a new company).

The new company can be incorporate with 99% of shares  acquire by public company by way of subscriber to the memorandum and another 1% of can acquire by either individual or another corporate (As per Companies Act, the members must be two for private company).

After incorporation proposed company must fall under subsidiary category (major shares held by public company which is called holding company, given case 99% held by public company) under section 4 of the companies Act.

If I wrong kindly advise to me.

Hi

ROC only issue Certificate of Incorporation in the name which was approved after Filing Form 1A, After issue of COI the company either be limited or private limited.

In any situation company  ROC can not issue a Certificate with addition of  "subsidiary of public company or private company".

Regards