Jagruti (Pvt.) Ltd. is a private limited company as per the Articles of Association of the
company. However, a public company acquired shares in Jagruti (Pvt.) Ltd., thereby making it
(Jagruti (Pvt.) Ltd.) a subsidiary of that public company. State the provisions and impact of
such acquisition of shares by a public company on Jagruti (Pvt.) Ltd.
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As per Section 2(71), “public company” means a company which—
(a) is not a private company and;
(b) has a minimum paid-up share capital, as may be prescribed:
Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles
In this case, the shares of Jagruti Pvt Ltd has been acquired by a public company thereby making it a subsidiary of a public company.
So, as per definition under Section 2(71), it will be deemed to be a public company as per Companies Act, 2013.
Explanation:
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