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Minimum no. of shareholders in wholly owned subsidary

Mansi ( ) (130 Points)

22 February 2016

Hello Experts, Presently ABC PLC owns 51% of stake in XYZ Pvt. Ltd. ABC PLC plans to purchase the balance 49% stake from existing shareholders. Thus, Post transfer XYZ Pvt Ltd will become wholly owned subsidiary of a foreign company. Can XYZ Pvt Ltd exists as a Private Limited Co since post transfer the number of shareholding reduces below 2 and a private limited company as per Companies Act, 2013 requires minimum 2 shareholders? Please Advise

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4 Replies

Gurprit (Company Secretary) (44 Points)
Replied 23 February 2016

all the shares will be on the name of Company and put one person as a nominee of the Company.

For eg.

Abc private limited 999 shares

Mr. A 1 Share

(Nominee of ABC Private limited)

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prakash (Company Secretary) (1352 Points)
Replied 23 February 2016

Mansi,

For appointing a nominee to hold one share to comply with provision of having minimum no of shareholders in company, need to comply with section 89 of CA, 2013.

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Mansi ( ) (130 Points)
Replied 23 February 2016

Prakash,

Thank You for your guidance,

Have referred Section 89. Have the following Query

Form MGT - 4 will be filled by the nominee holding say 1 share.

& Form MGT 5 will be filled by the Holding company holding rest say 99 shares?

is the above conclusion correct?

prakash (Company Secretary) (1352 Points)
Replied 24 February 2016

Yes,

Registered holder or person holding one share that is nominee shall file Form MGT-4 with Company (not with ROC) in duplicate, within a period of thirty days from the date on which his name is entered in the register of members of such company.

Beneficial owner or who is holding 99 shares shall file with Company (not with ROC) declaration disclosing such interest in Form No. MGT-5 in duplicate withn thirty days after acquiring such beneficial interest in the shares of the Company.

Where declaration received by Company, the Company will file, within a period of 30 days from the date of receipt of declarations by it, a return in Form No MGT-6 with ROC in respect of such declaration.

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