Private company which is a subsidiary of a public company?

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udit sharma (Querist)
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13 February 2012 Hi!

What will be the status of a Private Company which is a subsidiary of a Public Limited Company under the Companies Act, 1956? Whether it will be treated as a Public Limited Company and will have to comply with all the provisions of Companies Act, 1956 are as applicable to a Public Limited Company?

In my opinion, the definition of the term Public Limited Company provided under the Companies Act, 1956 was amended vide Companies (Amendment) Act, 2000 to include a Private Limited Company which is a subsidiary of a Public Company. Hence a Private Company which is a subsidiary of Public Limited Company will be treated at par with Public Limited Company and accordingly will have to comply with all the provisions applicable to Public Company under Companies Act, 1956.

This is my opinion and request you to throw some light on the matter.

Thanks

Jiten Gupta

Jiten Gupta (Expert)
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13 February 2012 Once a pvt ltd company becomes subsidiary of Public ltd company it shall be treated as Public ltd company. all the provisions which are applicabl on public ltd shall be applicabl on such subsidiary..

But still this company will be pvt ltd as name shall remain unchanged and AOA will contain restiction of section 3 etc..

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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13 February 2012 The Act has, in several sections, identified a private company which is a subsidiary of a public company and placed it at par with a public company, and thereby differentiated it from a private company which is not a subsidiary of a public company. It should be noted that this special treatment to the private companies which are subsidiaries of public companies does not create a separate class of companies nor does it change the basic structure of such company as a private company. It merely deprives these companies of the privileges and exemptions under the Act to which private companies are entitled. For the purposes of the following provisions of the Act, a private company, which is subsidiary of a public company is equated with public company;

Sec 77, Sec 86 to 88, Sec 166(2), Sec 170, Sec 192(4)(ee), Sec 198, Sec 204, Sec 220(1)(a), Sec 255 to 257, Sec 259,Sec 262 to Sec 264, Sec 268, Sec 270, 272, Sec 274, Sec 278, Sec 283, Sec 293, Sec 295, Sec 300, Sec 303, Sec 316, Sec 372A, Sec 388A, Sec 409 & Sec 416.

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