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Form mgt-7 and pcs certification

ARTHI (NIL) (293 Points)

11 March 2017

Dear Friends / Experts,

ABC PRIVATE COMPANY HAVING AUTHORISED CAPITAL RS.25 LACS AND PAID UP CAPITAL RS.1 LAC, is holding 100% equity shares in XYZ Private Company.

The Holding Company has been suffering losses year on year and yet to commence it’s business.

Query1

Please clarify, whether the said Holding Company shall fall within the meaning of SMALL COMPANY. If so, there is no applicability of AUDITOR’S ROTATION.

Your reply, please..............

Query2

Why PCS Certification is required in Form MGT-7 (FYE 31/03/2015) for the said Holding Company.

Your reply, please..............

Thanks in advance for possible replies from all concerned.

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3 Replies

Ajit Hegde (CA - Final) (1367 Points)
Replied 12 March 2017

Provision to section 2(85) says any holding or subsidiary company shall not fall within the meaning of small company. Hence holding company is not a small company. And yes, CS has to sign the form MGT7.

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Ajit Hegde (CA - Final) (1367 Points)
Replied 12 March 2017

Provisio to section 2(85) says any holding or subsidiary company shall not fall within the meaning of small company. Hence holding company is not a small company. And yes, CS has to sign the form MGT7.

Jatin Bajaj (CS) (2930 Points)
Replied 14 March 2017

SMALL COMPANY MEANS THE COMPANY WHICH IS DEFINED AS PER THE TRESHOLD LIMIT GIVEN UNDER SECTION 2(85) OF THE COMPANIES ACT 2013 BUT DIOES NOT INCLUDE ANY HOLDING OR SUBSIDIARY COMPANY. SO AS PER YOUR FIRST QUERY , IT IS NOT THE SMALL COMPANY.

AND AS PER SECTION 139(2), READ WITH RULE 5 OF AUDITOR RULE SUCH COMPANY DOES NOT FALL UNDER THE CRITERIA OF ROTATION OF AUDITOR, SO NO PROVISION OF ROTATION OF AUDITOR SHALL APPLY. AS PER SECTION 139(1), EVERY COMPANY AT THE FIRST AGM SHALL APPONT THE AUDITOR WHO SHALL HOLD THE OFFICE FROM THE CONCLSUION OF THIS MEETING TILL THE CONCLUSION OF SIXTH AGM AND THEREAFTER TILL THE CONCLUSION OF EVERY SIXTH AGM.

AND AS YOUR COMPANY DOES NOT FALL UNDER THE PERVIW OF CERTIFICATION , SO IT IS NOT REQUIRED TO CERTIFY THE ANNUAL RETURN IN FORM MGT 8.

BUT ANNUAL RETURN SHALL BE SIGNED BY THE dIRECTOR AND COMPANY SECRETARY IN FORM MGT 7 AND IF NO COMPANY SECRETARY , THEN BY PRACTISING COMPANY SECRETARY.