14 July 2009
1.Two public ltd companies were formed. 2.The date of certificate of incorporation are 24-01-2008 & 08-05-2008 respectively. 3.The certificate of commencement of business has not been taken till today. 4.Subscribers to MOA & AOA are 6 individuals and 1 is listed public ltd company (say A Ltd). A Ltd subscribed for 49,994 shares out of 50,000 shares and rest of the individuals subscribed for 1 share each. 5.Till today neither from A Ltd nor from 6 individuals, money on account of share capital is received by these companies. 6.Further, while finalizing the annual accounts of A ltd, the above companies were not shown/disclosed as subsidiaries and there accounts were also not incorporated in the annual report eventhough there were no transactions/activites done since commencement certificate is not obtained.
So following queries are raised-
1.Does A Ltd really becomes the holding company eventhough it has not purchased share capital of these companies. 2.Now A Ltd does not want to be the subscribers to MOA & AOA simply because they do not want these companies to be its subsidiaries. So now what is the remedy? 3.Although share capital is not received, can A Ltd transfer the shares in others name & get rid of the status of holding company (if at all it becomes holding company) 4.What is the consequences, for not showing these two companies as subsidiaries in the annual report of A Ltd as on 31-03-09. 5.What are the compliances to be made for these two companies from the date of incorporation with respect to accounts, audit, AGM, board meeting etc. 6.Today also, they have not received share capital so then what accounts to be finalized and how to take AGM and what needs to be put up in AGM. 7.Further no commencement certificate is obtained. Can it receive share capital now.
Section 433 provides that a company may be wound up by the High Court/Tribunal,—
(c) if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year;
Failure to commence business
Where a public company or a private company does not commence business within a year from its incorporation or where a company suspends its business for a whole year, a petition for winding up will lie. It is expected that the public company shall obtain the certificate to commence business within a reasonable time and also take action to commence business. On the other hand, a private company is authorised to commence business immediately on formation. Where in either case the company has not commenced its business within a year of its incorporation or within a reasonable period, it will be a ground for winding up.
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