Rashmi (CS) (90 Points)
01 February 2012Hello Members, Kindly resolve the query.
"A" Pvt ltd has two shareholders - P Inc (incorporated in UK) and Q Inc (incorporated in Germany)
holding 51% and 49% of A's share capital.
Both P and Q are public companies according to laws of UK and Germany and had they been
incorporated in INDIA, they would have been treated as public companies.
Can 'A' be a private company and not being a subsidiary of a public company?
jeets
(CS )
(461 Points)
Replied 01 February 2012
Hello,
Kindly give a detailed reading of section 4(7). It states in a very confusing way that in case the entire share capital is not held by one or more corporate incorporated outside india in such scenario it would be deemed to be as public company.
To put it in a simple way:-
In your case the entire share capital is held by foreign entities, In this case although Holding companies being a public company , the Indian entity would be a private company and not being a subsidiary of a public company....
To conclude:-
'A' be a private company and not being a subsidiary of a public company.
Experts views are solicited.
jeets
(CS )
(461 Points)
Replied 02 February 2012
Further, please read the attached extracts from Rammaiya... for detailed understanding.
jeets
(CS )
(461 Points)
Replied 02 February 2012
here goes the attachement...sorry
LIVE Course on Foreign Exchange Management Act (FEMA)(with recording)
CAclubindia
