22 November 2011
Can anyone Describe me the section 7(7) of the companies act Sectin 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.
23 November 2011
In simple words if a foreign company, [which if incorporated in India, would be a public company], holds entire share capital of an Indian private company (say XYZ private Limited) whether alone or together with one or more other bodies corporate incorporated outside India, then such Indian private company (say XYZ private Limited) would be considered as a private limited company as far as compliance of companies act, 1956 is concerned.
23 November 2011
Through section 4(7) an exemption is provided to a Private company whose 100% share capital is held by a foreign company (Would be Indian public company if incorporated in India).
Where such entire share capital of Indian private company is not held by foreign company (Would be Indian public company if incorporated in India), such private company would be considered as subsidiary of public company and have to comply all the provisions applicable to a public company.
CAclubindia
