Two Psu have 25% and 26% stake in a joint venture company which is a pvt company . Will this pvt company will be called as govt. company as per companies act. Please provide suitable reply.
Thanks for the query Manish, Sorry for the delayed reply, In case a company atleast 51% of shares mUST be held by CG or SG(s) or any combination of such government holdings and a company which is subsidiary of a govt. company is too a govt. company. And also as per section 2(87) I believe it is not a subsidiary company if 2 PSUs hold together such stake as stated above. Thus, Such a JV may not be said to be a govt. company. Below are the definitions relied upon from Companies Act, 2013
2(45 ) “Government company” means any company in which not less than fiftyone per cent. of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company. 2(87) “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company – (i) controls the composition of the Board of Directors; or (ii) exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies: Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed. Explanation – For the purposes of this clause, – (a) a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub-clause (i) or sub-clause (ii) is of another subsidiary company of the holding company; (b) the composition of a company’s Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors; (c) the expression “company” includes any body corporate; (d) “layer” in relation to a holding company means its subsidiary or subsidiaries;
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