What is Deemed Public Company – as per companies act 1956 & 2013

What is Deemed Public Company: This short article will try to describe what is considered business. It will likewise discuss about deemed company arrangement. It will cover modification under revised Companies Act. We will likewise see its effect on Foreign Direct Investment (FDI). now inspect more details about “Deemed Public Company” from listed below …

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What is Deemed Public Business

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What is deemed company under Companies Act 1956

  • Considered business refers to the personal business which is a subsidiary of the general public company.
  • Deemed business are treated at par with the public companies.
  • These business operate as personal business. However, they undergo legal and other compliances like a public business.
  • The Act considers a private subsidiary of the foreign body business to be deemed public company.
  • The only condition is that, such foreign body corporate would have been a public business in India, if it was integrated here.

What is Deemed company under Business Act 2013

  • Considered business would indicate a business which is subsidiary of a public business
  • It would make no distinction even if such subsidiary continues to be a private company by its short articles.

Altered position due to Modification in Act

Business Act 1956

  • Such exemption holds true only if such foreign body corporate would have been personal business, if signed up in India.
  • Where the foreign body business holds the whole share capital of the subsidiary, then the subsidiary would be personal company.
  • This saved lots of foreign business from ending up being considered public business.

    Companies Act 2013

  • Appropriately, even if a subsidiary of public company selects to be a personal company for internal matters, it will be dealt with as considered public business.
  • Because of this, most of the foreign business will not have any opportunities of private business.

    Effect of amendments in Business Act

    • Foreign companies are left with minimal option.
    • For This Reason, they would choose not to open subsidiaries in India, as they will be considered public business anyways.

      CONCLUSION

      Revised FDI norms (Foreign direct Investment) were expected to bring substantial foreign financial investment. Modification in under Business Act, has certainly let down the foreign investors.

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      • Dormant Business
      • Registration of Area 8 Business
      • Someone Business (OPC)
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