Query relating to shareholding pattern

This query is : Resolved

PRATICK SAHA (Querist)
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27 July 2013 ABC Pvt Ltd is a private company registered in India.
It has issued 100 shares. Out of which the 99 shares are held by XYZ Ltd which is a company registered in Mauritius and 1 share are held by XYZ Ltd and By Mr. Ram (Indian Individual) Jointly.
My query is that can such type of shareholding pattern is correct as per Companies Act 1956.
Because XYZ Ltd percentage of holding has become 100%
Our auditors have raised objection in such type of shareholding pattern.
They have advised us to make Mr. Ram as first holder of the shares which are jointly held by XYZ Ltd and Mr. Ram.
Kindly advice as what shall I do.

Ajay Mishra

Ajay Mishra (Expert)
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28 July 2013 Hi

I will suggest you to check what your any document or agreement proved that Mr. Ram is first holder or joint holder.

Hope you have made any kind of agreement which deal with such matter.

V K Bajaj

V K Bajaj (Expert)
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28 July 2013 Yes! Sir Ajay Mishra is always right and perfect.

But please note that Ram should be as first name (by rules as well as by religious ethics).

As XYZ Mauritius is holder of all shares except one. So to make AGM successful XYZ will appoint nominee of proxy and second one will be RAM.

So the one share should be in the name of Ram with the clause or condition that beneficiary is XYZ LTD.

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Ajay Mishra

Ajay Mishra (Expert)
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28 July 2013 I agree Sir, but if foreign party involve in any transaction, always trust on documentary prof, because RBI has strict vigilance on it.

So, I always believe that if foreign party involve in any transaction be ensure execution of proper documents.

I may be wrong, but i will always says to believe on documents and AOA of the company.

V K Bajaj

V K Bajaj (Expert)
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28 July 2013 @Ajay Mishra!

Sir your opinion and education is always stands ACCEPTED.

But I have stressed on the need to have RAM as first name to go smoothly and without much paper work in case of SHAREHOLDERS MEETINGS.

Ajay Mishra

Ajay Mishra (Expert)
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28 July 2013 Agree....

If we talk about proper conduction of general meeting Mr. Ram and representative of Foreign company (XYZ Ltd.) become the second shareholder of the general meeting.